D0E29 L8 - D0E29 - Theory of Economic Growth Lecture 8...

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Unformatted text preview: D0E29 - Theory of Economic Growth Lecture 8 Spring term 2008 Prof. Dr. Maarten Goos, Anna Salomons M. Goos, A. Salomons ( CES, KU Leuven) D0E29 L8 1 / 58 Today&s class Introduction to the topic Growth and Global Trade Discussion of "Trade, Growth, and Poverty" ) readings: "Trade, Growth, and Poverty" and "Dollar and Kraay on "Trade, Growth, and Poverty": A Critique" M. Goos, A. Salomons ( CES, KU Leuven) D0E29 L8 2 / 58 Introduction to the topic Growth & global trade Last week we looked at the debate about the sources of East-Asian growth: capital accumulation vs. technological change. This debate heavily leaned on the Solow model. Today, we look at the empirical debate about the impact of international trade on growth and income distribution in developing economies. Again the debate is not only academic: there have been violent protests at the WTO trade negotiations on the premise that international trade exploits (the poor in) developing countries. M. Goos, A. Salomons ( CES, KU Leuven) D0E29 L8 3 / 58 Introduction to the topic Growth & global trade: the controversy The debate about the e/ect of international trade on growth in developing economies can be split up in two main camps: Those who believe international trade enhances growth in developing countries, on the premise that international trade is actually one of the most important engines for growth (at least in developing countries). Those who take a more careful stand on the e/ect of international trade on growth in developing economies, arguing that results are mixed, that there are issues of reverse causation, that many other (policy) variables have an in¡uence on the impact of international trade on growth, and¢or that international trade is not the main or even an important factor for growth in developing economies. M. Goos, A. Salomons ( CES, KU Leuven) D0E29 L8 4 ¢ 58 Introduction to the topic Growth & global trade David Dollar and Aart Kraay (2004), ¡Trade, Growth and Poverty¢, The Economic Journal 114 (493), F22-F49 Howard L. M. Nye, Sanjay G. Reddy, and Kevin Watkins (2002), "Dollar and Kraay on "Trade, Growth, and Poverty": A Critique", International Development Economics Association M. Goos, A. Salomons ( CES, KU Leuven) D0E29 L8 5 / 58 Discussion of "Trade, Growth, and Poverty" M. Goos, A. Salomons ( CES, KU Leuven) D0E29 L8 6 / 58 Discussion format 1 What is the research question the authors try to answer? 2 How do the authors approach the question; how do they try to answer it? 1 Which theoretical framework do they use, and what assumptions do they make? (not relevant here) 2 What is their empirical methodology? And what are their results? 3 What is the conclusion the authors reach?...
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D0E29 L8 - D0E29 - Theory of Economic Growth Lecture 8...

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