Openess Trade and Growth Essay - 1086 Words

The economic growth story is as long as the history of economic thought. Since the early classics like Adam Smith, David Ricardo and Thomas Malthus studied the issue of growth or introduced fundamental concepts such as diminishing returns and their relationship with the accumulation of physical or human capital, the relationship between technological progress and labor specialization or focus competitive analysis tool dynamic equilibrium. As part of these theories appears arises that relationship between trade openness and economic growth is positive. These theories between trade openness and economic growth can be located more than 200 years, with the mercantilist theories. Under these concepts, International trade benefited a nation†¦show more content†¦There are several authors that put emphasis on the role of international trade as the main conduit of economic development. Influential papers in this school include Sach and Warner (1995), Frankel and Romer (1999), and Dollar and Kraay (2003). In these papers, trade strongly fosters economic convergence among countries and regions. The degree of trade openness has been a topic of debate in the literature in recent years for its effect on the growth of countries. There are many measures Some authors argue that trade openness is positive because to diversify the supply and provision of goods and services to a emergency. The other position assumes that trade liberalization does not imply any benefit as all internalize external shock quickly. Dollar and Kraay (2001) argue that countries with higher trade liberalization or globalized tend to grow faster than non-global. In contrast, Birdsall and Hamoudi (2002) argue that countries dependent on primary products have a lower rate growth and trade liberalization is not the only factor impact on growth but also the composition of exports. These authors divided the country in very dependent or less dependent on natural resources and equated to the terminology of Dollar and Kraay (2001) of countries globalized and non-globalized. Birdsall and Hamoudi also argue that there are other elements linked to trade liberalization, and out of control authorities affecting the use ofShow MoreRelatedQatar : The Richest Countries1735 Words   |  7 Pagescooporations, with it’s own high tech centers, biometrical facilities and so on†. Singapore is to encouraging growth and breath through, citing evidence from the website http://www.worldatlas.com/articles/the-richest-countries-in-the-world.html states â€Å"The basics of Singapore’s wealth is its financial sevices secter, a chemical export industry , and its liberal economic policies that encourage growth and innovation†. Furthermore, the next top fourth is Kuwait. 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