Openness and growth in a historical perspective: a VECM approach

Giovanni Federico, Paul Sharp and Antonio Tena-Junguito
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Giovanni Federico: University of Pisa, CEPR

No 118, Working Papers from European Historical Economics Society (EHES)

Abstract: Since Adam Smith, most economists have held the belief that trade fosters economic growth, although it has not been possible to establish a strong causal relationship. The results of growth regressions are, at best, mixed, and several historical studies have found a positive relationship between tariffs and economic growth in the nineteenth century. This paper adopts a different strategy. We look for cointegration between GDP per capita and openness for about thirty countries since 1830. About half return no cointegration – i.e. no relationship. The rest show mixed results, which change through time. An ordered probit model suggests that significantly positive relationships are more likely at low-to-middle income levels.

Keywords: Openness; growth; VECM; cointegration; trade (search for similar items in EconPapers)
JEL-codes: F1 N1 N7 (search for similar items in EconPapers)
Pages: 43 pages
Date: 2017-12
New Economics Papers: this item is included in nep-gro, nep-his and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:hes:wpaper:0118

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