Trade Liberalization, Investment and Growth

Name: Trade Liberalization, Investment and Growth
Brand: Vita e Pensiero
Price: 6.00 EUR
Availability: OnlineOnly

digital

Article

Magazine

RIVISTA INTERNAZIONALE DI SCIENZE SOCIALI

Issue

RIVISTA INTERNAZIONALE DI SCIENZE SOCIALI - 2003 - 1

Title

Trade Liberalization, Investment and Growth

Author

Elena Seghezza

Publisher

Vita e Pensiero

Format

Article |

Pdf

Pages

Online from

09-2017

Issn

0035-676X (print) | 1827-7918 (digital)

€ 6.00

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Description

This paper presents five theoretical openness and growth links that can account for trade-induced investment-led growth. The links are all demonstrated with a neoclassical growth model developed in the context of trade models that allow for imperfect competition and scale economies. This sort of old-growth theory in a new-trade model has not been thoroughly explored in the literature since the profession skipped from old-growth-old-trade models straight to new-growth-new-trade models. Nonetheless, such models are necessary to explain several key aspects of the econometric evidence on trade and growth. For example, cross-country data suggests that openness influences growth only via its effect on investment, and suggests that openness promotes investment in all countries whatever the capital-intensive of their exports (contrary to predictions of the old-growth-old-trade models).