International Trade, Distortions and Long-Run Economic Growth
AbstractThe links between trade and growth are examined in a neoclassical model of an open economy in which domestic production requires both domestic and imported inputs. The model shows that trade distortions induced by policies such as tariffs and exchange controls generate cross-country divergences in growth rates and in per capita income over a long period. The empirical results confirm that tariff rates and black market premia, interacting with the estimated share of free trade imports, have significant negative effects on the growth rate of per capita income across countries.
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Bibliographic InfoPaper provided by International Monetary Fund in its series IMF Working Papers with number 92/90.
Date of creation: 01 Nov 1992
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Other versions of this item:
- Jong-Wha Lee, 1993. "International Trade, Distortions, and Long-Run Economic Growth," IMF Staff Papers, Palgrave Macmillan, vol. 40(2), pages 299-328, June.
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
- F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
- O41 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-02-16 (All new papers)
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