Working Paper 63 - Trade, Trade Liberalisation and Economic Growth: Theory and Evidence
There can be little doubt that, historically, trade has acted as an important engine ofgrowth for countries at different stages of development, not only by contributing to a moreefficient allocation of resources within countries, but also by transmitting growth from onepart of the world to another. There are static and dynamic gains to be had from tradebetween countries but there is nothing in the theory of trade that says that the gains areequitably distributed. Also, there is nothing in the theory of Customs Unions that says thatthe gains from trade will be equitably distributed between members. Indeed, the CustomsUnion as a whole may be welfare-reducing if trade diversion exceeds trade creation. Recentresearch suggests that regional trade agreements, reduce growth and investment, butgeneralised trade liberalisation in the form of unilateral tariff reductions (or the reduction ofnon-tariff barriers to trade) improves growth performance. Export growth relax the balanceof payments constraint on demand by providing the foreign exchange to pay for the importcontent of higher levels of consumption, investment and government expenditure. Mostdeveloping countries are constrained in their growth performance by a shortage of foreignexchange and could therefore grow faster with more exports.
|Date of creation:||12 Mar 2002|
|Date of revision:|
|Contact details of provider:|| Postal: 15 Avenue du Ghana P.O.Box 323-1002 Tunis-Belvedère, Tunisia|
Phone: (+216) 71 10 39 00
Fax: (225) 21.77.53
Web page: http://www.afdb.org/en/knowledge/publications/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Jaime De Melo & Arvind Panagariya & Dani Rodrik, 2015.
"The New Regionalism: A Country Perspective,"
World Scientific Book Chapters,
in: Developing Countries in the World Economy, chapter 14, pages 323-357
World Scientific Publishing Co. Pte. Ltd..
- de Melo, Jaime & Panagariya, Arvind & Rodrik, Dani, 1992. "The New Regionalism: A Country Perspective," CEPR Discussion Papers 715, C.E.P.R. Discussion Papers.
- de Melo, Jaime & Panagariya, Arvind & Rodrik, Dani, 1993. "The new regionalism : a country perspective," Policy Research Working Paper Series 1094, The World Bank.
- Anthony Philip Thirlwall, 1983.
"Foreign trade elasticities in centre-periphery models of growth and development,"
BNL Quarterly Review,
Banca Nazionale del Lavoro, vol. 36(146), pages 249-261.
- Anthony Philip Thirlwall, 1983. "Foreign trade elasticities in centre-periphery models of growth and development," Banca Nazionale del Lavoro Quarterly Review, Banca Nazionale del Lavoro, vol. 36(146), pages 249-261.
- Dixon, R & Thirlwall, A P, 1975. "A Model of Regional Growth-Rate Differences on Kaldorian Lines," Oxford Economic Papers, Oxford University Press, vol. 27(2), pages 201-14, July.
- J. S. L. McCombie & A. P. Thirlwall, 1997. "The Dynamic Harrod Foreign Trade Multiplier and the Demand-orientated Approach to Economic Growth: an Evaluation," International Review of Applied Economics, Taylor & Francis Journals, vol. 11(1), pages 5-26.
- Sebastian Edwards, 1991.
"Trade Orientation, Distortions and Growth in Developing Countries,"
NBER Working Papers
3716, National Bureau of Economic Research, Inc.
- Edwards, Sebastian, 1992. "Trade orientation, distortions and growth in developing countries," Journal of Development Economics, Elsevier, vol. 39(1), pages 31-57, July.
- Feder, Gershon, 1983. "On exports and economic growth," Journal of Development Economics, Elsevier, vol. 12(1-2), pages 59-73.
- Esfahani, Hadi Salehi, 1991. "Exports, imports, and economic growth in semi-industrialized countries," Journal of Development Economics, Elsevier, vol. 35(1), pages 93-116, January.
- Anthony Thirlwall, 1995. "The Terms of Trade, Debt and Development: with Particular Reference to Africa," African Development Review, African Development Bank, vol. 7(1), pages 1-34.
When requesting a correction, please mention this item's handle: RePEc:adb:adbwps:197. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Adeleke Oluwole Salami)
If references are entirely missing, you can add them using this form.