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Free Trade, Growth, and Convergence

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Abstract

Can trade liberalization have a permanent affect on output levels, and more important, does it have an impact on steady-state growth rates? The model emphasizes the role that knowledge spillovers emanating from heightened trade can have on income convergence and growth rates during transition and over the long run. Among the results of the model, unilateral liberalization by one country reduces the income gap between the liberalizing country and other, wealthier countries. From the long-run growth perspective, unilateral (and multilateral) liberalization generates a positive impact on the steady-state growth of all the trading countries.

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Authors and Affiliations

  1. Tel Aviv University, Tel Aviv, Israel, 69978

    Dan Ben-David

  2. National Bureau of Economic Research, Cambridge, MA, 02138, USA

    Dan Ben-David

  3. Centre for Economic Policy Research, London, EC1V 7AB, England

    Dan Ben-David

  4. University of South Florida, Tampa, FL, 33620, USA

    Michael B. Loewy

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  1. Dan Ben-David
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  2. Michael B. Loewy
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Ben-David, D., Loewy, M.B. Free Trade, Growth, and Convergence. Journal of Economic Growth 3, 143–170 (1998). https://doi.org/10.1023/A:1009705702579

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