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Does trade cause growth? A policy perspective

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  • Wälde, Klaus

Abstract

Several empirical papers have shown that international trade has a positive causal effect on a country's GDP or growth rate. A common conclusion from these results is that a free trade policy will increase a country's GDP. This comment does not dispute the empirical findings per se but questions this conclusion. An example is provided that shows that it is not obvious which policy recommendations can be supported by these empirical findings. --

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Bibliographic Info

Paper provided by Dresden University of Technology, Faculty of Business and Economics, Department of Economics in its series Dresden Discussion Paper Series in Economics with number 10/00.

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Date of creation: 2000
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Handle: RePEc:zbw:tuddps:1000

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  1. Brecher, Richard A, 1974. "Minimum Wage Rates and the Pure Theory of International Trade," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 88(1), pages 98-116, February.
  2. Jung, Woo S. & Marshall, Peyton J., 1985. "Exports, growth and causality in developing countries," Journal of Development Economics, Elsevier, Elsevier, vol. 18(1), pages 1-12.
  3. David H. Romer & Jeffrey A. Frankel, 1999. "Does Trade Cause Growth?," American Economic Review, American Economic Association, American Economic Association, vol. 89(3), pages 379-399, June.
  4. Wälde, Klaus & Wood, Christina, 2000. "The empirics of trade and growth: Where are the policy recommendations?," Dresden Discussion Paper Series in Economics 09/00, Dresden University of Technology, Faculty of Business and Economics, Department of Economics.
  5. Jong-Wha Lee, 1992. "International Trade, Distortions and Long-Run Economic Growth," IMF Working Papers 92/90, International Monetary Fund.
  6. Mayer, Wolfgang, 1974. "Short-Run and Long-Run Equilibrium for a Small Open Economy," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 82(5), pages 955-67, Sept./Oct.
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