Home About Latest Browse RSS Advanced Search

Federal Reserve Bank of San Francisco
Pacific Basin Working Paper Series
Trade and growth in East Asian countries: cause and effect?
Jeffrey A. Frankel
David Romer
Teresa Cyrus
Abstract

Estimates of growth equations have found a role for openness, particularly in explaining rapid growth among East Asian countries. But major concerns of simultaneous causality between growth and trade have been expressed. This study aims to deal with the endogeneity of trade by using as instrumental variables the exogenous determinants from the gravity model of bilateral trade, such as proximity to trading partners. Our preliminary finding is that the effect of openness on growth is even clearer when we correct for the endogeneity of openness than in standard OLS estimates. We conclude with estimates of how much has been contributed to East Asian growth by openness (both the exogenous or geographical component of openness and the residual or policy component).


No download available
Cite this item
Jeffrey A. Frankel & David Romer & Teresa Cyrus, Trade and growth in East Asian countries: cause and effect?, Federal Reserve Bank of San Francisco, Pacific Basin Working Paper Series 95-03, 1995.
More from this series
JEL Classification:
Subject headings:
Keywords: East Asia ; Economic development ; International trade ; Gross domestic product
For corrections, contact Federal Reserve Bank of San Francisco Research Library ()
Fed-in-Print is the central catalog of publications within the Federal Reserve System. It is managed and hosted by the Economic Research Division, Federal Reserve Bank of St. Louis.

Privacy Legal