KDI 한국개발연구원 - 경제정책정보 - 발간처별 목록 - 국외 경제사회연구원 - IIE - Does Trade Reform Promote Economic Growth? A Review of Recent Evidence

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Does Trade Reform Promote Economic Growth? A Review of Recent Evidence

IIE 2019.06.25
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Do trade reforms that significantly reduce import barriers lead to faster economic growth? In the two decades since the critical survey of empirical work on this question by Francesco Rodriguez and Dani Rodrik in 2000, new research has tried to overcome the various methodological problems that have plagued previous attempts to provide a convincing answer. This paper examines three strands of recent work on this issue: cross-country regressions focusing on within-country growth, synthetic control methods on specific reform episodes, and empirical country studies looking at the channels through which lower trade barriers may increase productivity. A consistent finding is that trade reforms that significantly reduce import barriers have a positive impact on economic growth, on average, although the effect differs across countries. Overall, these research findings should temper some of the previous agnosticism about the empirical link between trade reform and economic performance.

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