The empirics of trade and growth: where are the policy recommendations?

Klaus Wälde and Christina Wood

No 204, European Economy - Economic Papers 2008 - 2015 from Directorate General Economic and Financial Affairs (DG ECFIN), European Commission

Abstract: Existing literature repeatedly documented a strong correlation between trade and growth. It has also shown a causal effect of imports (though not necessarily exports) on growth in simultaneous equation models but to a lesser extent in Granger-causality tests. Export and import taxes have sometimes been found to negatively affect growth. Drawing policy conclusions from these general findings for a particular country is difficult not only because of the contradictory results but also because of potential second best world effects and the implied endogeneity of trade policy. Policy recommendations for a specific country require a careful analysis of market and institutional arrangements and can not be based on the existing cross-country literature.

Keywords: theoretical trade and growth studies; empirical trade and growth studies; policy recommendations; Wälde; Wood (search for similar items in EconPapers)
Pages: 19 pages
Date: 2004-05
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Citations: View citations in EconPapers (8)

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Related works:
Journal Article: The empirics of trade and growth: where are the policy recommendations? (2004)
Working Paper: The Empirics of Trade and Growth: Where are the Policy Recommendations ? (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:euf:ecopap:0204

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