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| N°19 |
| Summer 2003 |
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| Does Trade Lead to
Economic Convergence? Revisiting Ben-David |
| Guillaume Gaulier |
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| Former WTO Director-General, Mike Moore,
stated repeatedly that openness to trade helps developing countries catch
up with rich ones, thus reiterating Dan Ben-David's findings in research
for the WTO. A recent study by the CEPII aimed at revisiting Ben-David's
work and it shows that trade is not generally linked to a reduction in the
dispersion of per capita GDP across countries. The existence of a weak form
of convergence within trade-based groups, however, is due to a bias in selecting
large countries in these groups. In total, even if trading with large countries
is beneficial for developing economies, the evidence for trade as a channel
for convergence remains limited. |
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