Maqola

Does Trade Cause Growth?

Jeffrey A. FrankelKennedy School of Government, Harvard University, Cambridge, MA 02138David RomerDepartment of Economics, University of California, Berkeley, CA 94720

1999en

ABI

Annotatsiya

Examining the correlation between trade and income cannot identify the direction of causation between the two. Countries' geographic characteristics, however, have important effects on trade, and are plausibly uncorrelated with other determinants of income. This paper therefore constructs measures of the geographic component of countries' trade, and uses those measures to obtain instrumental variables estimates of the effect of trade on income. The results provide no evidence that ordinary least-squares estimates overstate the effects of trade. Further, they suggest that trade has a quantitatively large and robust, though only moderately statistically significant, positive effect on income. (JEL F43, O40)

Identifikatorlar

DOI: 10.1257/aer.89.3.379

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