TY  - JOUR
AU  - Harrison,Ann
AU  - Revenga,Ana
TI  - The Effects of Trade Policy Reform: What Do We Really Know?
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 5225
PY  - 1995
Y2  - August 1995
UR  - http://www.nber.org/papers/w5225
L1  - http://www.nber.org/papers/w5225.pdf
N1  - Author contact info:
Ann Harrison
The Wharton School
University of Pennsylvania
2016 Steinberg Hall-Dietrich Hall
3620 Locust Walk
Philadelphia, PA 19104-6370
Tel: 215 746 3132
E-Mail: annh@wharton.upenn.edu

Ana Revenga
World Bank
1818 H. Street, NW
Washington, DC 20433
E-Mail: arevenga@worldbank.org
AB  - The magnitude of existing research on the effects of trade reform is impressive.  Yet economists have not reached a clear consensus on a number of important questions such as the labor market impact of trade reform, the linkages between trade and foreign direct investment, and the relationship between trade and growth.  In this paper we attempt to clarify what we know about the relationship between trade reform, factor markets, and growth. Although many studies have shown a positive relationship between various measures of openness and growth, many nagging problems remain. Trade policy is almost never measured using the most obvious indicators -- such as tariffs.  In addition, many studies are plagued by serious econometric problems.  The evidence on labor markets and trade reform is less extensive.  Based on the studies to date, it appears that the unemployment and wage effects of trade reforms have generally been small.  In the paper, we discuss the possibility that small wage and employment responses are due to labor market regulations.  The paper concludes with an analysis of the linkages between trade policies and foreign investment flows.  Our evidence suggests that trade reform has been accompanied by significant increases in investment inflows.
ER  -