The effects of autocatalytic trade cycles on economic growth

Jurriën J. Bakker (), Oscar Afonso and Sandra Silva ()
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Jurriën J. Bakker: Eindhoven University of Technology

FEP Working Papers from Universidade do Porto, Faculdade de Economia do Porto

Abstract: In the first part of this paper the effects of trade cycles on economic growth are discussed to test the hypothesis of autocatalytic trade cycles, which indicates that more innovation is produced in countries that are a part of these cycles. Using United Nations data, a trade network is constructed and from this network, a set of variables that represent the participation of countries in trade cycles are constructed. A clear relation between these variables and economic growth is found. However, this relationship changes for different trade cycle sizes, categories of goods and time scales. Trade cycles also have a positive effect for the trade flows involved, although this effect differ significantly depending on the size of the trade cycle. The second part of the paper shows that the effects of trade cycles can be translated into policy recommendations. These conclusions strenghten existing literature but also add new insights to innovation policy and the pursuit of economic prosperity.

Keywords: innovation; autocatalytic trade cycles, international trade, policy (search for similar items in EconPapers)
JEL-codes: C3 F1 O3 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2012-03
New Economics Papers: this item is included in nep-ino
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: The effects of autocatalytic trade cycles on economic growth (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:por:fepwps:451

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