Abstract
Countries' geographic characteristics have important effects on their trade, and are plausibly uncorrelated with other determinants of their incomes. This paper therefore constructs measures of the geographic component of countries' trade and uses those measures to obtain instrumental variables estimates of the effect of trade on income. The results suggest that ordinary least squares estimates understate the effects of trade, and that trade has a quantitatively large, significant, and robust positive effect on income.
Keywords
Ordinary least squaresInstrumental variableUncorrelatedEconomicsEconometricsInternational economicsInternational tradeStatisticsMathematics
Related Publications
Government Partisanship, Labor Organization, and Macroeconomic Performance: A Corrigendum
Alvarez, Garrett and Lange (1991) used cross-national panel data on the Organization for Economic Coordination and Development nations to show that countries with left governmen...
Determinants of Current Account Deficits in Developing Countries
July 2000 - In developing countries, increases in current account deficits tend to be associated with a rise in domestic output growth and shocks that increase the terms of trad...
Economic Growth in a Cross Section of Countries
In neoclassical growth models with diminishing returns to capital, a country's per capita growth rate tends to be inversely related to its initial level of income per person.Thi...
Economic Growth in a Cross Section of Countries
For 98 countries in the period 1960-1985, the growth rate of real per capita GDP is positively related to initial human capital (proxied by 1960 school-enrollment rates) and neg...
Relative Cohort Size and Fertility: The Socio-Political Context of the Easterlin Effect
The conclusion of this study is that structures of collective social protection and changes in rates of female labor force participation influence cohort relative economic stat...
Publication Info
- Year
- 1996
- Type
- preprint
- Citations
- 115
- Access
- Closed
External Links
Citation Metrics
115
OpenAlex
Cite This
Jeffrey A. Frankel,
David Romer
(1996).
Trade and Growth: An Empirical Investigation.
RePEc: Research Papers in Economics
.