Economic Globalization, Mercantilism and Economic Growth

Gaowang Wang and Heng-Fu Zou ()

No 548, CEMA Working Papers from China Economics and Management Academy, Central University of Finance and Economics

Abstract: Obstfeld (1994) shows theoretically that international economic integration accelerates economic growth of all countries in the world, which does not match the data very well. By introducing Zou (1994)'s viewpoints of mercantilism into the Obstfeld model, the paper shows that the excessive pursuits for wealth heighthen the demand for financial assets with high return and high risk in the global financial market which distorts the mechanism of financial market promoting economic growth, and hence leads to different growth performances within different countries. Specifically, for different economies, not only do the same technology or preference shocks have different growth effects, but also economic integration has different growth effects.

Keywords: Globalization; Economic Growth; Mercantilism (search for similar items in EconPapers)
JEL-codes: C61 F43 G11 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2012
New Economics Papers: this item is included in nep-cwa and nep-fdg
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:cuf:wpaper:548

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