DOES INTERNATIONAL TRADE CAUSE ECONOMIC GROWTH AND PROSPERITY?
This book analyzes the relationship between openness and economic growth. The study is done despite the vast existing literature on the subject. The theoretical literature does not provide a clear answer to the relation between openness and economic growth and therefore creates the demand for additional empirical work. The central aim of this book is to figure out whether openness generates economic growth or not. There are two major steps. First, an index for measuring openness will be introduced. This task, as easy as it may sound, is not a straightforward procedure. Different economists have used various indexes to categorize countries according to the degree of their openness among which Sachs and Warner (1995), and Edwards (1997) are to name a couple. These indexes all generally have the disadvantage of not being able to represent a real measurement of openness. By not real we mean that they do not take all determinants of openness into account. The reason is in part related to th
