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International Finance Discussion Papers
The International Finance Discussion Papers logo links to the International Finance Discussion Papers home page Why has Trade Grown Faster than Income?
Andrew K. Rose
1990-390  (November 1990)

Abstract:  Trade of the OECD countries has grown faster than income during the postwar period. This paper tests a number of different hypotheses for the observed growth in the trade/income ratio. For small open economies, increases in real output and international reserves, as well as declines in tariff rates are associated with growth in the ratio. There are important differences in the behavior of the trade ratio across time and country size.

Full paper(265 KB PDF)

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