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Trade as an engine of growth: The lewis versus riedel controversy revisited

  • Development Strategy
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Intereconomics

Abstract

Is there a stable quantitative relationship between the exports of developing countries and prosperity in developed countries? The controversy between Lewis and Riedel on this question is taken up anew in this paper and examined in the light of ten years of added data and by estimating additional relationships.

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References

  1. W. Arthur Lewis: The slowing down of the engine of growth, in: American Economic Review, Vol. 70, No. 4, pp. 555–564. Reprinted in: Mark Gersovitz (ed.): Selected Economic Writtings of W. Arthur Lewis, New York University Press, 1983.

  2. James Riedel: Trade as an engine of growth in developing countries, in: The Economic Journal, 1984, pp. 56–73.

  3. W. Arthur Lewis, op. cit. The slowing down of the engine of growth, in: American Economic Review, Vol. 70, No. 4, p. 556. Lewis considers world trade in primary products an acceptable proxy for LDC exports and the growth rate of industrial production in the developed countries as a proxy for prosperity in the developed countries.

  4. James Riedel, op. cit. Trade as an engine of growth in developing countries, in: The Economic Journal, 1984, pp. 59.

  5. Oli Havrylyshyn and Martin Wolf: Recent trends in trade among developing countries, in: European Economic Review, Vol. 21 (1983), pp. 333–362.

  6. Sanjaya Lall: Trade Between Developing Countries, in Singer, Hatti and Tandon: Challenges of South-South Cooperation (part 2), 1988, pp. 389–413.

  7. Ibid. Sanjaya Lall: Trade Between Developing Countries, in Singer, Hatti and Tandon: Challenges of South-South Cooperation (part 2), 1988, p. 396.

  8. Cf. also James Riedel, op. cit. Trade as an engine of growth in developing countries, in: The Economic Journal, 1984, p. 66.

  9. For an explanation of this test procedure, see Damodar N. Gujarati: Basic Econometrics, 2nd edition, 1988, pp. 446–448.

  10. United Nations: Annual Statistical Yearbook, various issues; United Nations: Yearbook of International Trade Statistics, issues 1981 and 1987, special table G.

  11. UNCTAD: Handbook of International Trade and Development Statistics, 1988, table 2.1.

  12. OECD: Economic Outlook, various issues.

  13. For a precise listing of countries belonging to this group, see UNCTAD: Handbook of International Trade and Development Statistics, 1988, p. 20.

  14. For a precise listing of countries, see footnote 14.

  15. United Nations: Yearbook of International Trade Statistics, various issues.

  16. UNCTAD: Handbook of International Trade and Development Statistics, 1988, table 2.1.

  17. GATT: International Trade 1987–88, table AF3.

  18. W. Arthur Lewis, op. cit. The slowing down of the engine of growth, in: American Economic Review, Vol. 70, No. 4, pp. 287–288.

  19. James Riedel, op. cit. Trade as an engine of growth in developing countries, in: The Economic Journal, 1984, pp. 68.

  20. World Bank: Commodity and Price Trends, editions August 1980 and 1988/89. This source inter alia gives physical volume of exports making deflations unnecessary.

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Authors and Affiliations

  1. Finnmark College, Alta, Norway

    Ivar Bredesen

  2. Institute of World Economics, Kiel, Germany

    Susann Strobel

Authors
  1. Ivar Bredesen
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  2. Susann Strobel
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Additional information

The authors would like to thank Mr. Matthew McQuenn of Reading University who suggested this study to us and for helpful comments on an eanier draft. Mr. Rolf Langhammer of the Kiel Institute of World Economics also provided useful suggestions for which we are grateful.

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Bredesen, I., Strobel, S. Trade as an engine of growth: The lewis versus riedel controversy revisited. Intereconomics 26, 51–57 (1991). https://doi.org/10.1007/BF02929536

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