What is the impact of movement towards free trade on output? Can this impact permanently affect output levels, and more importantly, will it have an impact on steady-state growth rates? This paper provides empirical evidence showing how countries have exhibited substantial increases in their...

In international trade literature, there is a common feature that the abolishment of barriers to trade leads to the expansion of trade flows. Most of the empirical studies aiming at simulation of welfare effects of trade liberalization explicitly make use of this direct tariff reduction - trade...