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Trade and economic growth: A re-examination of the empirical evidence

Author

Listed:
  • Matthias Busse

    (Ruhr-University Bochum)

  • Jens Koeniger

    (Ruhr-University Bochum)

Abstract

While trade integration is often regarded as a principal determinant of economic growth, the empirical evidence for a causal linkage between trade and growth is ambiguous. This paper argues that the effect of trade in dynamic panel estimations depends crucially on the specification of trade. Both from a theoretical as well as an empirical point of view one specification is preferred: the volume of exports and imports as a share of lagged total GDP. For this trade measure, a positive and highly significant impact on economic growth can be found.

Suggested Citation

  • Matthias Busse & Jens Koeniger, 2015. "Trade and economic growth: A re-examination of the empirical evidence," Economics Bulletin, AccessEcon, vol. 35(4), pages 2862-2876.
    • Handle: RePEc:ebl:ecbull:eb-15-00066
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    References listed on IDEAS

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    More about this item

    Keywords

    Openness; Trade; Growth;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance

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