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Trade Liberalization under New Realities

  • Syed Zahid Ali

    (LUMS)

  • Sajid Anwar
Registered author(s):

    The last decade has witnessed significant influx of direct foreign investment in developing countries. The increased flow of foreign investment has contributed to the ability of developing countries to produce import competing manufactured goods by combining imported and domestically produced inputs. This situation has to some extent changed the comparative advantage of developing countries. Within the context of this development, this paper attempts to examine the effectiveness of devaluation and other import restricting polices. The paper argues that trade liberalization remains the most desirable policy. Specifically a cut in import and export duties are found to be beneficial both in the short-run and the long-run.

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    File URL: http://www.eaber.org/node/22243
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    Paper provided by East Asian Bureau of Economic Research in its series Trade Working Papers with number 22243.

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    Date of creation: Jan 2005
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    Handle: RePEc:eab:tradew:22243
    Contact details of provider: Postal: JG Crawford Building #13, Asia Pacific School of Economics and Government, Australian National University, ACT 0200
    Web page: http://www.eaber.org

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    1. Reinhart, Carmen & Rogoff, Kenneth, 2004. "The modern history of exchange rate arrangements: A reinterpretation," MPRA Paper 14070, University Library of Munich, Germany.
    2. A. U. Santos-Paulino, 2002. "Trade Liberalisation and Export Performance in Selected Developing Countries," Journal of Development Studies, Taylor & Francis Journals, vol. 39(1), pages 140-164.
    3. Denny Lewis-Bynoe & Jennifer Griffith & Winston Moore, 2002. "Trade Liberalization And The Manufacturing Sector: The Case Of The Small Developing Country," Contemporary Economic Policy, Western Economic Association International, vol. 20(3), pages 272-287, 07.
    4. Jorge Saba Arbache & Andy Dickerson & Francis Green, 2004. "Trade Liberalisation and Wages in Developing Countries," Economic Journal, Royal Economic Society, vol. 114(493), pages F73-F96, 02.
    5. Thorvaldur Gylfason & Michael Schmid, 1983. "Does Devaluation Cause Stagflation?," Canadian Journal of Economics, Canadian Economics Association, vol. 16(4), pages 641-54, November.
    6. Greenaway, David & Morgan, Wyn & Wright, Peter, 2002. "Trade liberalisation and growth in developing countries," Journal of Development Economics, Elsevier, vol. 67(1), pages 229-244, February.
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