International Trade and Economic Growth Nexus in Australia: A Robust Evidence from Time-Series Estimators

摘要

He effects of international trade on economic growth remain an area of unresolved controversy in the open economy macroeconomics. The neoclassical theory of international trade (Heckscher, 1919; Ohlin, 1933) assumes perfect competition and constant returns to scale and provides an unambiguous support to the economic and welfare gains of free trade. Paradoxically, the neoclassical theory of economic growth (Solow, 1956; Swan, 1956) does not recognise the role of trade in growth, and it assumes that the growth is driven by an increase in the use of factor inputs, capital and labour, and the exogenous improvements in technology.