International Trade And Economic Growth - 1317 Words

Nowadays, the international trade is very important for a growth economy, specially with advanced technologies that facilitate communication. To obtain financial and technological resources for economic growth, the nation needs certainly to participate in world trade. International trade of developing countries leads to high growth and significant changes in the commodity structure by reflecting changes in the economy. The countries in all over the world are economically interdependent. No any nation can exist in economic isolation. If the economy of one nation crashed, other nations in the world will probably be unstable as well. And that would be worse if that nation among to developed nations. The gains from trade are dynamic because they cause changes in economy‘s evolution through time. From a macroeconomic perspective, we can analyze the gains from trade by focusing on the relation between trade openness and economic growth. From a microeconomic perspective we can analyze the gains from trade by focusing on connections between firm productivity and access to international markets. Recently, the literature on the dynamic gains from trade takes a different approach rather than broad-based measures of GDP and economic openness. On the theory side, the heterogeneous firms models of Melitz (2003) and Chaney (2008) present a rigorous basis for the existence of a link between trade liberalization and within-sector productivity gains: as less productive firms exit the marketShow MoreRelatedThe Role of International Trade in Economic Growth of Countries699 Words   |  3 PagesINTRODUCTION International trade plays a significant role in the economic growth of countries. It gives a country an opportunity to specialize in products and services that can be produced at a low cost compared to other nations, that is a comparative advantage. 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