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Matthias Busse and Jens Koeniger
''Trade and economic growth: A re-examination of the empirical evidence''
( 2015, Vol. 35 No.4 )
While trade integration is often regarded as a principal determinant of economic growth, the empirical evidence for a causal linkage between trade and growth is ambiguous. This paper argues that the effect of trade in dynamic panel estimations depends crucially on the specification of trade. Both from a theoretical as well as an empirical point of view one specification is preferred: the volume of exports and imports as a share of lagged total GDP. For this trade measure, a positive and highly significant impact on economic growth can be found.
Keywords: Openness, Trade, Growth
JEL: F1 - Trade: General
F4 - Macroeconomic Aspects of International Trade and Finance: General
Manuscript Received : Feb 23 2015 Manuscript Accepted : Dec 26 2015

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