One of the great economic debates of all times is whether trade liberalisation or rather protectionism promotes economic growth (Case, Fair and Oster, 2009, p. 710). Ricardo (1955) claims with his theory of comparative advantage that specialisation and free trade benefits all participants. The producers and consumers ostensibly gain access to a wider range of products at lower prices and higher quality, the resources are used more efficiently, and the manufacturers may expand their products and facilities in foreign markets. However, in all times some politicians and market participants have been arguing against free trade and in favour of protection. Trade liberalisation would destroy jobs in non-competitve sectors, infant industries may have no chance to develop and the domestic economy depends to strong on foreign markets. The aim of this report is to discuss the link beween trade liberalisation and economic growth based on data and statistical outcomes.
Inhaltsverzeichnis (Table of Contents)
- Introduction
- Methodology
- Evolution of restrictions and GDP
- Percentiles of the restriction variable
- Correlation between level of restriction and GDP in the continents
- Independent sample T-test (Hypothesis test)
- Caveat in the analysis
- Conclusion
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This report aims to explore the relationship between trade liberalization and economic growth using data and statistical analysis. It utilizes the KOF Index of Globalization to measure trade liberalization and GDP to measure economic growth, analyzing data from 136 countries and six continents from 1970 to 2007.
- The impact of trade liberalization on economic growth
- The evolution of trade restrictions and GDP across continents
- Correlation between trade liberalization and GDP
- Statistical analysis using SPSS to support arguments for and against trade liberalization
Zusammenfassung der Kapitel (Chapter Summaries)
- Introduction: This chapter introduces the debate surrounding the relationship between trade liberalization and economic growth. It presents opposing arguments, highlighting Ricardo's theory of comparative advantage and the potential benefits of free trade, while also acknowledging concerns about job losses and the vulnerability of infant industries.
- Methodology: This chapter defines trade liberalization and explains the methodology used in the report. It introduces the KOF Index of Globalization, which is used to measure trade liberalization, and provides details about the data sources and statistical analysis methods employed.
- Evolution of restrictions and GDP: This chapter analyzes the trends in trade restrictions and GDP across six continents from 1970 to 2007. It highlights the increasing liberalization trend in all continents and discusses the varying levels of economic growth observed.
Schlüsselwörter (Keywords)
Trade liberalization, economic growth, KOF Index of Globalization, GDP, restrictions to trade, comparative advantage, protectionism, infant industries, SPSS, statistical analysis, correlation, hypothesis test.
- Quote paper
- Felix Magg (Author), 2011, Link between trade liberalisation and economic growth, Munich, GRIN Verlag, https://www.grin.com/document/175634
