International Trade and Economic Growth: the Outlook for the 1980s

Abstract

Often in the past, economists have analysed the relation between international trade and national economic growth. For the market economies they have usually concluded that international trade makes a more efficient use of national resources possible and that it generates several multiplicative effects (via incomes and prices of products and production factors) which are likely to enhance economic growth. There are economists who will be inclined to identify in the rapid growth of the recent post-war period the application of many of the theoretical mechanisms of the positive enhancing relation between trade and growth. However, as always happens in the social sciences, various other factors stimulating economic growth have been at play during this period: conscious growth policies of governments, for one; also, the more subtle effect of psychological attitudes in production agents and the population at large, continuously favourable to so-called ‘material’ economic growth. Furthermore, economic growth has had an effect on international trade, facilitating structural readjustments, making possible and accommodating rapid shifts in the relative prices of commodities.