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Trade Policy, Exchange Rates, and Growth

In: Reform, Recovery, and Growth: Latin America and the Middle East

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  • Sebastian Edwards

Abstract

This paper analyzes the relationship between trade policy and economic performance. The paper is divided in two fundamental parts. The first one uses a cross country data set to investigate the relationship between trade policy and productivity growth. It is found that countries that are more open to the rest of the world have experienced faster growth in total factor productivity than countries with high trade barriers. In the second part the recent Latin American experiences with trade liberalization reforms are investigated. It is shown that in the last few years the Latin American countries have gone from having one of the most distorted external sectors, to having very low degrees of protectionism. The extent of the liberalization efforts is documented and the effect on productivity and exports is investigated.
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Suggested Citation

  • Sebastian Edwards, 1995. "Trade Policy, Exchange Rates, and Growth," NBER Chapters, in: Reform, Recovery, and Growth: Latin America and the Middle East, pages 13-52, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberch:7649
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • F1 - International Economics - - Trade
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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