Trade and development - a selective review

Abstract

This paper reviews parts of the recent literature on trade and growth. The relationships between trade and growth have been extensively studied in recent research. Many studies indicate that trade stimulates income and growth. The literature is controversial and many studies are criticised for weaknesses in methodology. Despite the methodological controversies, most evidence gives support for the view that trade stimulates growth. It is argued that major deficiency in the literature is that it does not discriminate between the impact of market access in other countries and the impact of liberal domestic trade policies.