International Trade, Distortions and Long-Run Economic Growth

The links between trade and growth are examined in a neoclassical model of an open economy in which domestic production requires both domestic and imported inputs. The model shows that trade distortions induced by such government policies as tariffs and exchange controls generate cross-country diver...

Full description

Main Author: Lee, Jong-Wha
Format: eBook
Language:English
Published: Washington, D.C. International Monetary Fund 1992, 1992
Series:IMF Working Papers; Working Paper
Subjects:
Online Access:
Collection: International Monetary Fund - Collection details see MPG.ReNa
Summary:The links between trade and growth are examined in a neoclassical model of an open economy in which domestic production requires both domestic and imported inputs. The model shows that trade distortions induced by such government policies as tariffs and exchange controls generate cross-country divergences in growth rates and in per capita income over a long transitional period. The empirical results confirm that tariff rates and black market premia, interacting with an estimate of the share of free trade imports, have significant negative effects on the growth rate of per capita income across countries in the orders of magnitude predicted by the model
Physical Description:41 p.
ISBN:1451851332
9781451851335