This paper studies how the effect of trade openness on economic growth depends on complementary reforms that help a … gains after trade liberalization depend on the degree of labor market flexibility. In that model, trade protection may … ameliorate the problem of underemployment (and underproduction) in sectors affected by labor market distortions; hence trade …

According to the Washington Consensus, developing countries? growth would benefit from a reduction in tariffs and other … barriers to trade. But a backlash against this view now suggests that trade policies have little or no impact on growth. If …" (Easterly 2005, Rodrik 2006). However, the empirical basis for judging recent trade reforms is weak. Econometrics are mostly ad …

much richer than smaller ones. New trade models share this same problematic feature: although small countries gain more … from trade than large ones, this is not strong enough to offset the underlying scale effects. In fact, new trade models … exhibit other counterfactual implications associated with scale effects – in particular, domestic trade shares and relative …