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Trade Liberalization, Economic Crises, and Growth

Rodney Falvey (), Neil Foster-McGregor () and Sir David Greenaway ()

World Development, 2012, vol. 40, issue 11, 2177-2193

Abstract: Many economic reforms are undertaken during an economic crisis, but is a crisis a good time to undertake trade reform? We investigate whether an economic crisis at the time of trade liberalization affects a country’s subsequent growth performance. We employ threshold regression techniques on five crisis indicators to identify the “crisis values” and to estimate the differential growth effects in the crisis and non-crisis regimes. Although trade liberalization in both crisis and non-crisis periods raises subsequent growth, we find that an internal crisis implies a lower acceleration and an external crisis a higher acceleration relative to the non-crisis regime.

Keywords: trade liberalization; growth; crises (search for similar items in EconPapers)
Date: 2012
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Working Paper: Trade Liberalisation, Economic Crises and Growth (2008) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:eee:wdevel:v:40:y:2012:i:11:p:2177-2193

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