01792cas a2200241 a 4500 AALejournalIMF008369 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451845594 1018-5941 BD-DhAAL BD-DhAAL Brunner, Allan. The Long-Run Effects of Tradeon Income and Income Growth / Allan Brunner. Washington, D.C. : International Monetary Fund, 2003. 1 online resource (39 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students This paper examines the dynamic relationship between trade and income. While most economists agree that increased trade leads to an increase in average income, economic theory is ambiguous about the possible effects on the long-run growth rate of the economy. Using a dynamic panel data model, the hypotheses of no long-run effects of trade on income and on income growth are tested explicitly. The possibility of endogeneity is addressed by constructing an instrument for trade by extending Frankel and Romer's (1999) cross-sectional approach to the case of a panel data model. The empirical results indicate that trade has a large and significant effect on the level of income, but the effect on income growth is small and non-robust to model specification. Mode of access: Internet IMF Working Papers; Working Paper ; No. 2003/037 Full text available on IMF http://elibrary.imf.org/view/journals/001/2003/037/001.2003.issue-037-en.xml IMF e-Library