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Trade openness and economic growth: Search for a causal relationship. Does openness reduce poverty?
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Trade openness and economic growth: Search for a causal relationship. Does openness reduce poverty?

A.F.M.K. Hassan
South Asian Journal of Management, Vol.12(4), pp.38-51
2005

Abstract

This paper examines whether openness to international trade plays any role in reducing poverty in Bangladesh through its impact on economic growth. First, the paper examines the causal relationship between trade openness and economic growth and then examines the structure of international trade to see whether it is conducive to generate employment and income sufficient to reduce poverty in Bangladesh. Granger-causality test is employed to ascertain the direction of causality between trade openness and economic growth. The paper finds that there is long-run equilibrium relationship between trade openness and economic growth and there is unidirectional causality from trade openness to economic growth. But the structure of trade was not such that helps reducing poverty in Bangladesh.

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