The impact of global trade on economic growth

Overall, the results showed that growth in real exports does cause real GDP growth.

impact of international trade on economic growth in kenya

I focus here on all countries with data over the period The Review of Economic Studies, 83 1 In a similar way, if we look at country-level data from the last half century we find that there is also a correlation between economic growth and trade: countries with higher rates of GDP growth also tend to have higher rates of growth in trade as a share of output.

You can find a similar chart using different data sources and time periods in Ventura, J. Handbook of economic growth, 1, This is a classic example of the so-called instrumental variable approach.

international trade research paper pdf

Some key references here are: — Pavcnik, N. These studies also find that trade liberalization has led to growth in the productivity of firms. This basic correlation is shown in the chart below, where I plot average annual change in real GDP per capita, against growth in trade average annual change in value of exports as a share of GDP.

impact of international trade on economic growth in india

Bloom, N.

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Does trade cause growth?