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In a distinguished career spanning more than four decades, Jagdish Bhagwati has made numerous contributions to both trade theory and trade policy analysis. The current paper focuses on Bhagwati's major contribution to the ongoing debate surrounding the influence of trade liberalisation upon economic development and its potential to alleviate poverty in the world's poorest economies. In order to highlight Bhagwati's contributions in these fields we focus on the arguments developed in two of his numerous landmark publications; first his seminal 1964 paper on the Pure Theory of International Trade and, second, his 2004 book entitled In Defense of Globalization. Although separated in time by some four decades we argue that these two publications, despite their very different characters, each demonstrate beyond doubt the significance of Bhagwati's work in improving our understanding of the true nature of international trade and its potential to address questions of global poverty. [ABSTRACT FROM AUTHOR]

Abstract: This paper looks at the link between the quality of economic institutions and innovation, and innovation and growth. We construct a measure of the innovation content of individual manufacturing industries and show that countries with stronger economic institutions specialize in more innovation‐intensive industries. Our results also provide evidence that industries involving higher levels of innovation grow relatively faster in countries with better economic institutions. The results suggest that innovation is an important channel through which higher quality economic institutions contribute to better growth performance in the long run. [ABSTRACT FROM AUTHOR]

It has been 30 years since Central Asian '‐stan' countries, namely, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan, declared their independence in 1991. The Republics have chosen various transition paths from centrally planned to the market‐based economic system. The research found that Central Asian leaders' protectionist policy, on top of the landlocked geographical environment, made trade costly, rendering these countries further isolated. Consequently, economic development slows down, unemployment increases and poverty rate extremes. Eventually, the isolated region (relatively, excluding Kazakhstan) is imprisoned in a low‐income trap and framed into a vicious circle. As a solution for tackling high‐trade costs in the region, this paper utilises the Global Trade Analysis Project (GTAP) Computational General Equilibrium (CGE) modelling to simulate the impacts of implementing policy‐targeted scenarios. The study presents that tariff reduction/elimination and trade facilitation policies could flourish the region by bringing significant economic welfare and robust GDP growth. The trade facilitation scenarios impact the region's economy much more positively than do tariff liberalisation scenarios. [ABSTRACT FROM AUTHOR]

The serial underperformer of the region, Myanmar's economy is largely without the institutions and qualities necessary to achieve genuine economic growth. This paper explores the fundamentals of Myanmar's economy, from a perspective that emphasizes policy and institutional failure as the principal determinants of the country's present circumstances. The paper explores Myanmar's economy in a multifaceted way, examining concerns over economic growth, public finances, monetary and financial policies, corruption, and international trade. Notwithstanding the change in the form of Myanmar's governing institutions following the elections of November 2010, the paper concludes pessimistically as to the likelihood of meaningful economic reform in the foreseeable future. [ABSTRACT FROM AUTHOR]

Abstract: This paper addresses two research issues to which Chris Milner has contributed: the role of trade policy in economic development, and the particular development case of Mauritius. On the first issue, the focus is on understanding why so few low‐income countries, especially in Africa, have achieved a sustained level of export diversification. The paper argues that the standard “Washington Consensus” advice on trade policy placed too much emphasis on liberalisation alone and neglected the important role of government policy, in particular the potential to use targeted input subsidies to support the development of export sectors. Mauritius is then discussed as an example of relatively successful subsidy policies that enabled diversification of exports: indeed the only African country to achieve this in a sustained manner. Subsidies are not advocated as a panacea, and it is recognised that they are not always feasible or effective, but they can be part of an export diversification strategy that supports economic growth. [ABSTRACT FROM AUTHOR]

Abstract: A major concern for developing economies is a dependence on commodities when their prices are volatile as a major change in the international commodity price can have important implications for economic growth. While some cross‐country studies exist, there is lack of country specific studies that take into account the different characteristics of low‐income economies. This paper contributes to the growing literature by considering the case of Malawi and the macroeconomic impact of price shocks in its major export crop of tobacco. Using a structural vector autoregression (SVAR) approach on quarterly Malawian data from 1980:1 to 2012:4, the paper establishes that a positive tobacco price shock has a significant positive impact on the country's gross domestic product, decreasing consumer prices and inducing real exchange rate appreciation. The results are robust to alternative specifications of a SVAR on difference stationary data and cointegrating VAR. The cointegrating VAR confirms the existence of a long run‐relationship among the variables and causality that runs from tobacco prices. [ABSTRACT FROM AUTHOR]

Services constitute a significant part of GDP and overall trade in modern economies, but little is known about the magnitude of its obstacles. Great effort has been made to establish measures of services trade frictions on the part of the Organization of Economic Cooperation and Development (OECD) and the World Bank. A customary way of using these measures is to employ them in log‐linear regressions to gauge their effect on services trade flows. This may be problematic to the extent that these measures do not capture ad valorem (tariff type price increasing) trade costs. Hence, it is natural to believe that available services trade cost measures may have a nonlinear impact on services trade flows. The present paper documents that this is the case, using nonparametric estimates to quantify the direct impact of important trade cost measures captured by the Services Trade Restrictiveness Index of the OECD on cross‐border services transaction costs and trade. [ABSTRACT FROM AUTHOR]

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This paper surveys the empirical literature on export and import diversification and its linkages with growth. We review widely used measures of diversification and the evidence about their evolution focusing on how export diversification relates to trade liberalization and economic development. We also discuss the linkages between trade diversification and productivity at the firm and industry level, highlighting new advances on the linkages between import diversification and productivity. [ABSTRACT FROM AUTHOR]

The paper investigates the impact of Asia's demand rebalancing and supply‐side productivity changes on long‐term economic growth in Asia and worldwide. Results from a panel vector autoregression model show that a productivity–neutral demand‐rebalancing shock has no permanent effect on Asian output, whereas labour productivity shocks have significant, positive and permanent effects. Simulations using a global intertemporal multisector general equilibrium model suggest that labour productivity shocks increase the foreign GDP over time, but rebalancing shocks have a negative international spillover effect. In addition, labour productivity shocks help in rebalancing. Structural reforms promoting labour productivity growth along with rebalancing policies across Asia can achieve higher economic growth worldwide. [ABSTRACT FROM AUTHOR]