TY  - JOUR
AU  - Frankel,Jeffrey A.
AU  - Romer,David
AU  - Cyrus,Teresa
TI  - Trade and Growth in East Asian Countries: Cause and Effect?
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 5732
PY  - 1996
Y2  - August 1996
UR  - http://www.nber.org/papers/w5732
L1  - http://www.nber.org/papers/w5732.pdf
N1  - Author contact info:
Jeffrey A. Frankel
Kennedy School of Government
Harvard University
79 JFK Street
Cambridge, MA 02138
Tel: 617/496-3834
Fax: 617/496-5747
E-Mail: jeffrey_frankel@harvard.edu

David H. Romer
Department of Economics
University of California
Berkeley, CA 94720-3880
E-Mail: dromer@econ.berkeley.edu

Teresa Cyrus
M2  - featured in NBER digest on 1997-02-01
AB  - Estimates of growth equations have found a role for openness, particularly in explaining rapid growth among East Asian countries.  But major concerns of simultaneous causality between growth and trade have been expressed.  This study aims to deal with the endogeneity of trade by using as instrumental variables the exogenous determinants from the gravity model of bilateral trade, such as proximity to trading partners.  We find that the effect of openness on growth is even stronger when we correct for the endogeneity of openness than in standard OLS estimates.  We conclude with estimates of how much has been contributed to East Asian growth both by the exogenous or geographical component of openness and by the residual or policy component.
ER  -