Openness and Growth: What's the Empirical Relationship?

Robert Baldwin

No 9578, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: There is still disagreement among economists concerning how a country's international economic policies and its rate of economic growth interact, despite a number of multi-country case studies utilizing comparable analytical frameworks, numerous econometric studies using large cross-country data sets, and important theoretical advances in growth theory. This paper briefly surveys this literature and points out the main reasons for the disagreements. Particular attention is given to an important study by Francisco Rodriguez and Dani Rodrik (2001) criticizing the conclusion of a number of recent multi-country statistical studies that openness is associated with higher growth rates. Rodriguez and Rodrik show that openness simply in the sense of liberal trade policies seems to be no guarantee of faster growth. However, the conclusion of most researchers involved in either country studies or multi-country statistical tests that lower trade barriers in combination with a stable and non-discriminatory exchange-rate system, prudent monetary and fiscal policies and corruption-free administration of economic policies promote economic growth still seems to remain valid.

JEL-codes: F13 F14 (search for similar items in EconPapers)
Date: 2003-03
New Economics Papers: this item is included in nep-dev and nep-mac
Note: ITI
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (88)

Published as Baldwin, R.E. and L. Alan Winters (eds.) Challenges to Globalizationc: Analyzing the Economics. Chicago: National Bureau of Economic Research-University of Chicago Press, 2004.
Published as Openness and Growth: What's the Empirical Relationship? , Robert E. Baldwin. in Challenges to Globalization: Analyzing the Economics , Baldwin and Winters. 2004

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