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Is International Openness associated with faster economic growth?

Author

Listed:
  • James Proudman
  • Stephen Redding
  • Marco Bianchi

Abstract

This paper considers the role of international openness in facilitating the convergence of average income per capita between countries. The statistical technique of Discriminant Analysis is used to sort economies into groups of open and closed on the basis of a number of measures of the stance of international trade policy. The evolution of the cross-section distribution of average income per capita across countries is modelled both for the whole world, and then for the groups of open and closed economies separately. Open economies are found to exhibit substantially different income dynamics and to converge to higher levels of income compared to their closed counterparts. These differences remain even after making allowance for differences in countries' relative levels of investment.

Suggested Citation

  • James Proudman & Stephen Redding & Marco Bianchi, 1997. "Is International Openness associated with faster economic growth?," Bank of England working papers 63, Bank of England.
    • Handle: RePEc:boe:boeewp:63
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    File URL: http://www.bankofengland.co.uk/archive/Documents/historicpubs/workingpapers/1997/wp63.pdf
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    References listed on IDEAS

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    Cited by:

    1. Epstein, Philip & Howlett, Peter & Schulze, Max-Stephan, 2000. "Distribution dynamics: stratification, polarisation and convergence among OECD economies, 1870-1992," Economic History Working Papers 22380, London School of Economics and Political Science, Department of Economic History.
    2. Epstein, Philip & Howlett, Peter & Schulze, Max-Stephan, 2007. "Trade, convergence, and globalisation: The dynamics of the international income distribution, 1950-1998," Explorations in Economic History, Elsevier, vol. 44(1), pages 100-113, January.
    3. Iván Arribas & Francisco Pérez & Emili Tortosa-Ausina, 2014. "The dynamics of international trade integration: 1967–2004," Empirical Economics, Springer, vol. 46(1), pages 19-41, February.
    4. Arribas, Iván & Bensassi, Sami & Tortosa-Ausina, Emili, 2020. "Trade integration in the European Union: Openness, interconnectedness, and distance," The North American Journal of Economics and Finance, Elsevier, vol. 52(C).
    5. Beyaert, Arielle & García-Solanes, José, 2014. "Output gap and non-linear economic convergence," Journal of Policy Modeling, Elsevier, vol. 36(1), pages 121-135.
    6. Rimvie Enoc Kabore, 2021. "Complementarity between human capital and public infrastructure in industrial comparative advantage," Working Papers hal-03359662, HAL.
    7. Gavin Cameron & James Proudman & Stephen Redding, 1999. "Openness and its association with productivity growth in UK manufacturing industry," Bank of England working papers 104, Bank of England.
    8. Dinopoulos, Elias & Thompson, Peter, 2000. "Endogenous growth in a cross-section of countries," Journal of International Economics, Elsevier, vol. 51(2), pages 335-362, August.
    9. Wajdi Bardi & Mohamed Ali Hfaiedh, 2021. "International trade and economic growth: evidence from a panel ARDL-PMG approach," International Economics and Economic Policy, Springer, vol. 18(4), pages 847-868, October.

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