Link between trade liberalisation and economic growth

Term Paper , 2011 , 23 Pages , Grade: 88 %

Economics - Case Scenarios

One of the great economic debates of all times is whether trade liberalisation or rather protectionism promotes economic growth (Case, Fair and Oster, 2009, p. 710). Ricardo (1955) claims with his theory of comparative advantage that specialisation and free trade benefits all participants. The producers and consumers ostensibly gain access to a wider range of products at lower prices and higher quality, the resources are used more efficiently, and the manufacturers may expand their products and facilities in foreign markets. However, in all times some politicians and market participants have been arguing against free trade and in favour of protection. Trade liberalisation would destroy jobs in non-competitve sectors, infant industries may have no chance to develop and the domestic economy depends to strong on foreign markets. The aim of this report is to discuss the link beween trade liberalisation and economic growth based on data and statistical outcomes.

Contents

List of figures

List of tables

1. Introduction

2. Methodology

3. Evolution of restrictions and GDP

4. Percentiles of the restriction variable

5. Correlation between level of restriction and GDP in the continents

6. Independent sample T-test (Hypothesis test)

7. Caveat in the analysis

8. Conclusion

Reference list

Bibliography

Appendix A: Variables and weights of the restriction index

Appendix B: Correlations between index of restriction and GDP in the six continents

Appendix C: Countries with negative correlation between index of restriction and GDP

Appendix D: Independent sample T-tests

Appendix E: Evolution of the index of restriction and the GDP in countries with negative correlations, 1970 - 2007

• College: Edinburgh Napier University
• Grade: 88 %
• Author: Felix Magg (Author)
• Publication Year: 2011
• Pages: 23
• Catalog Number: V175634
• ISBN (eBook): 9783640966608
• ISBN (Book): 9783640966769
• Language: English
• Tags: trade liberalisation, economic growth, growth, trade