Measuring the Dynamics Gains from Trade
This article investigates the links between trade policy and economic growth in a panel of 57 countries between 1970 and 1989. It develops a new measure of trade policy openness based on the policy component of trade shares, using it in a simultane...
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| Language: | English en_US |
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World Bank, Washington, DC
2014
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| Online Access: | http://documents.worldbank.org/curated/en/2001/09/17737156/measuring-dynamics-gains-trade http://hdl.handle.net/10986/17436 |
| Summary: | This article investigates the links
between trade policy and economic growth in a panel of 57
countries between 1970 and 1989. It develops a new measure
of trade policy openness based on the policy component of
trade shares, using it in a simultaneous equations system to
identify the effect of trade policy on several determinants
of growth. The result suggests a positive impact of openness
on economic growth, with the accelerated accumulation of
physical capital accounting for more than half the total
effect; for smaller effects. This decomposition is robust
with respect to alternative specifications and time periods.
The article also successfully tests whether the model
exhaustively captures the effects of trade policy on growth. |
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