Trade and Growth in East Asian Countries: Cause and Effect? / Jeffrey A. Frankel, David Romer, Teresa Cyrus.

Format:

Book

Author/Creator:

Frankel, Jeffrey A.

Contributor:

National Bureau of Economic Research.

Romer, David.

Cyrus, Teresa.

Series:

Working Paper Series (National Bureau of Economic Research) no. w5732.

NBER working paper series no. w5732

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Trade and Growth in East Asian Countries

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1996.

Summary:

Estimates of growth equations have found a role for openness, particularly in explaining rapid growth among East Asian countries. But major concerns of simultaneous causality between growth and trade have been expressed. This study aims to deal with the endogeneity of trade by using as instrumental variables the exogenous determinants from the gravity model of bilateral trade, such as proximity to trading partners. We find that the effect of openness on growth is even stronger when we correct for the endogeneity of openness than in standard OLS estimates. We conclude with estimates of how much has been contributed to East Asian growth both by the exogenous or geographical component of openness and by the residual or policy component.

Notes:

Print version record

August 1996.