Openness to International Trade and Economic Growth: A Cross-Country Empirical Investigation

Bulent Ulasan

Working Papers from Research and Monetary Policy Department, Central Bank of the Republic of Turkey

Abstract: This paper examines the long-run relationship between trade open-ness and economic growth across countries over the period 1960-2000. Two strategies are followed in empirical investigation. First, we extend the augmented neo-classical growth model with an openness variable and estimate it by using a battery of openness measures suggested in the literature. We also construct three composite trade policy indexes consisting of weighted averages of tari� rates, non-tari� barriers and black market premium for foreign exchange rate. Second, we implement Bayesian model averaging technique to deal with the model uncertainty, a fundamental problem which has been plaguing the previous works on the topic. Our �ndings show that there is no robust link between trade openness and long-run economic growth.

Keywords: Economic Growth; Trade Openness; Cross-Country Growth Regression; Model Uncertainty; Bayesian Model Averaging (search for similar items in EconPapers)
JEL-codes: C11 C21 C52 F43 O47 (search for similar items in EconPapers)
Date: 2014
New Economics Papers: this item is included in nep-fdg, nep-gro, nep-int, nep-mac and nep-opm
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:tcb:wpaper:1407

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