A Note on Impacts of International Trade on Economic Growth and Inflation |
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Authors: | Ling T He |
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Institution: | 1. Carmichael Professor of Finance, Department of Economics and Finance , University of Central Arkansas , Conway, Arkansas, USA linghe@uca.edu |
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Abstract: | Results of this study indicate that short- and long-term effects of international trade on inflation, GDP, and inflation-adjusted GDP growth vary over periods with fixed or freely floating exchange rates or a big accumulated trade deficit. Causalities between trade and other macroeconomic variables are also different in different periods. This study does not find supportive evidence that “phantom GDP gains” may significantly change impacts of imports on productivity, CPI, and inflation-adjusted GDP and causalities between imports and other macroeconomic variables, although a structural break is found in the relationship between imports and GDP at the beginning of 2003. |
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Keywords: | international trade exchange rates trade deficit economic growth inflation phantom GDP gains |
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