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Economic Globalization, Mercantilism and Economic Growth

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  • Gaowang Wang

    (Central University of Finance and Economics)

  • Heng-fu Zou

    (Central University of Finance and Economics)

Abstract

Obstfeld (1994) shows theoretically that international economic integration accelerates economic growth of all countries in the world, which does not match the data very well. By introducing Zou (1994)'s viewpoints of mercantilism into the Obstfeld model, the paper shows that the excessive pursuits for wealth heighthen the demand for financial assets with high return and high risk in the global financial market which distorts the mechanism of financial market promoting economic growth, and hence leads to different growth performances within different countries. Specifically, for different economies, not only do the same technology or preference shocks have different growth effects, but also economic integration has different growth effects.

Suggested Citation

  • Gaowang Wang & Heng-fu Zou, 2012. "Economic Globalization, Mercantilism and Economic Growth," CEMA Working Papers 548, China Economics and Management Academy, Central University of Finance and Economics.
    • Handle: RePEc:cuf:wpaper:548
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    References listed on IDEAS

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    Cited by:

    1. Siham Matallah & Amal Matallah, 2017. "Do Globalization and Economic Freedom Trigger Economic Growth in MENA Countries? Empirical Evidence and Policy Implications," Academic Journal of Economic Studies, Faculty of Finance, Banking and Accountancy Bucharest,"Dimitrie Cantemir" Christian University Bucharest, vol. 3(2), pages 76-87, June.

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    More about this item

    Keywords

    Globalization; Economic Growth; Mercantilism;
    All these keywords.

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies

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