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- Title
Does free trade really reduce growth? Further testing using the economic freedom index *.
- Authors
Berggren, Niclas; Jordahl, Henrik
- Abstract
The article discusses whether free trade reduces economic growth. In a recent article, two economists advanced the literature using the Economic Freedom of the World Index by investigating the growth effects of the various areas of the index. They reported a surprising finding, namely that the area "International exchange: Freedom to trade with foreigners" exerts a negative influence on economic growth. In the article it is shown that this result is not robust and caution against using the negative result in offering policy advice. Even though most economists have argued for a positive effect of free trade, there are theoretical arguments both to support the contention that free trade improves economic performance and the opposite view.
- Subjects
FREE trade; ECONOMIC development; ECONOMIC policy; INTERNATIONAL trade; BUSINESS cycles; ECONOMIC activity
- Publication
Public Choice, 2005, Vol 122, Issue 1/2, p99
- ISSN
0048-5829
- Publication type
Article
- DOI
10.1007/s11127-005-3994-2