Does Free Trade Advance Economic Growth?

• Main Author: Kidane, Frewyeni
• Format: Others
• Language: English
• Published: Uppsala universitet, Nationalekonomiska institutionen 2006
• Subjects: Free trade; Economic growth; Measures of openness.; Economics; Nationalekonomi
• Online Access: http://urn.kb.se/resolve?urn=urn:nbn:se:uu:diva-6393

I have conducted a survey of journal articles that have examined the relationship between free trade and economic growth. In particular, I have carefully selected six empirical studies that were published over a ten-year period and critically reviewed, and evaluated these studies in depth. I have also extensively presented and discussed the issues as well as the controversies that are related to the various measures of openness. In a number of the trade-growth empirical studies researchers have made major attempt to identify the relationship between free trade and economic growth. Most of the trade-growth studies show that there is a positive relationship between free trade and economic growth. However, some of these influential studies have been subject to strong criticism, mainly due to a number of methodological shortcomings. As for the million-dollar question: Does free trade advance economic growth? My conclusion is that this question is not yet resolved, because although researchers have devoted considerable efforts to show a positive trade-growth relationship, nevertheless, the methodologies and the measurements applied in these studies have been fragile to the scrutiny of critics.