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This paper surveys five decades of empirical research on the macroeconomic impact of aid, looking mainly at studies examining the link between aid and growth. It argues that studies dating until the late 1990s produced either contradictory or inconclusive results. Aid either worked, or it didn't, according to this research. The paper then highlights a major shift in the literature that coincided with the release of the World Bank's Assessing Aid: What Works, What Doesn't and Why. Practically, all research published since that report agrees with its general finding that aid works to the extent that in its absence, growth would be lower. One controversy may therefore have been settled. Yet, as shown in this paper, the report has set-off an intense debate over the context in which aid works. That debate centres on whether the effectiveness of these inflows depends on the policy regime of recipient countries. Some possible avenues through which the heat might be taken out of this debate are considered. Copyright © 2006 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]

Abstract: The KOF indices of globalisation are the most used globalisation measures in international economics literature, but it uses the nominal trade openness measure to construct the globalisation index. In this paper, we use real trade openness instead of nominal trade openness and recalculate the KOF economic globalisation index over the period 1970–2013. Using the panel data regressions for 146 countries, we revisit the economic globalisation–economic growth nexus to investigate the robustness of the KOF economic globalisation index. We consider several possibilities in model specifications, and the results show that using nominal trade openness measure in calculating the KOF globalisation index is statistically robust. In addition, the KOF economic globalisation index in logarithmic form introduces a more robust outlook in the panel data regressions—a lower bias is emerged by considering different trade openness measures to calculate the globalisation level. [ABSTRACT FROM AUTHOR]

Abstract: Despite phenomenal technological progress and exponential growth in computing power, economic growth remains comparative sluggish. In this paper, we investigate two core issues: (1) is there really no connection between ICT and national economic growth? and (2) what factors moderate the ICT–growth relationship? We apply meta‐regression analysis to 466 estimates drawn from 59 econometric studies that explore the Solow or Productivity Paradox that there is little impact of ICT on economic growth and productivity. We explore the differential impact of ICT on developed and developing countries and the differential impact of different types of ICT: landlines, cell phones, computer technology and Internet access. After accommodating potential econometric misspecification bias and publication selection bias, we detect evidence that ICT has indeed contributed positively to economic growth, at least on average. Both developed and developing countries benefit from landline and cell technologies, with cell technologies’ growth effect approximately twice as strong as landlines. However, developed countries gain significantly more from computing than do developing countries. In contrast, we find little evidence that the Internet has had a positive impact on growth. [ABSTRACT FROM AUTHOR]

Japan is known to have an exceptionally low level of inward foreign direct investment (FDI). The promotion of inward FDI is one of the policy goals of Abenomics structural reforms. This present paper studies the accumulation of Japan's inward FDI stock during the first 3 years of Abenomics (2012-2015), and finds no evidence that Japan's inward FDI stock increased more than the trend before Abenomics started would have predicted. A comparison of the main policies for promoting inward FDI that have been implemented to the real and perceived impediments to inward FDI reveals that it may be advisable to shift the emphasis of the policy to address more regulatory and administrative issues and to reduce the cost of doing business in Japan. [ABSTRACT FROM AUTHOR]

It is commonly argued that 'institutions matter' for growth and poverty reduction. While recognising the importance of institutions, it is necessary to go ' beyond institutions' in understanding the factors that promote growth and poverty reduction. This paper draws on the research findings of the IPPG Research Consortium (Improving Institutions for Pro-Poor Growth), some of which are included in this issue, to make the following arguments. We argue, first, that the ways in which economic, political and social institutions interact are crucial in shaping pro-poor development outcomes. Secondly, the establishment of effective institutions also requires the building and strengthening of effective social, political and economic organizations, across sectors and issue areas, which can push for, negotiate, implement and monitor locally appropriate and legitimate institutional arrangements if the aim of poverty reduction is to have sustained traction as a policy goal. Copyright © 2011 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]

Using simulations projecting Chinese economic growth into the future, this paper first examines when China will overtake the USA to become the largest economy. Demographic changes that affect economic growth are taken into consideration in these projections. China is expected to become number one sometime in the mid-2020s, unless its growth rate of gross domestic product per worker declines dramatically, à la the lost decade of Japan. Next, the paper examines whether China becoming the number one economy will mean its currency, the renminbi (RMB), will become the international key currency. According to the basket currency regressions during the period that Chinese currency was gradually appreciating against the US dollar from July 2005 to August 2008, it is shown that the RMB has already acquired a strong influence on the Asian currencies. This shows that the RMB is fast gaining the status of a regional anchor currency for a possible regional joint float. As the Chinese government proceeds with internationalization of its currency, the RMB is expected to gain in the ranking of other aspects of international currency, such as the store of value and the medium of exchange. [ABSTRACT FROM AUTHOR]

Boulding's 1966 paper on the economics of spaceship Earth established the framework for ecological economics and an understanding of economic growth. In ecological economics, economies are conceptualized as open subsystems of the closed biosphere and are subject to biophysical laws and constraints. Economic growth measured as an increase in real gross domestic product (GDP) has generally been associated with increases in the use of energy and materials and the generation of wastes. Scale, composition, and technology are the proximate determinants of environmental impacts. They are often reduced to two: scale (GDP) and intensity (impact per unit GDP). New work described in this paper defines “green” growth as intensity that declines faster than scale increases. Similarly, “brown” growth occurs when intensity declines more slowly than increases in scale, and “black” growth happens when both scale and intensity increase. These concepts are then related to the environmental Kuznets curve, which can be understood as a transition from brown to green growth. Ecological economics provides a macroperspective on economic growth. It offers broad policy principles, and it challenges the primacy of economic growth as a policy objective, but many important questions remain. [ABSTRACT FROM AUTHOR]

The impact of institutions on economic performance has attracted significant attention from researchers, as well as from policy reformers. A rapidly growing area in this literature is the impact of economic freedom on economic growth. The aim of this paper was to explore publication bias in this literature by means of traditional funnel plots, meta-significance testing, as well as by bootstrapping these meta-significance tests. When all the available estimates are combined and averaged, there seems to be evidence of a genuine and positive economic freedom – economic growth effect. However, it is also shown that the economic freedom – economic growth literature is tainted strongly with publication bias. The existence of publication bias makes it difficult to identify the magnitude of the genuine effect of economic freedom on economic growth. The paper explores the differences between aggregate and disaggregate measures of economic freedom and shows that selection effects are stronger when aggregate measures are used. [ABSTRACT FROM AUTHOR]

This paper surveys the convergence literature. It begins by laying out different definitions of convergence and by showing the link between the convergence issue and the growth theory debate. The paper then follows the convergence research conducted along four different approaches, namely the cross-section, panel, time-series, and distribution approaches. The paper shows the association of these methodological approaches with various definitions of convergence and highlights the connections among the convergence results. It shows that, despite some impressions to the contrary, there is considerable agreement among the results. Although the convergence research might not have solved the growth debate entirely, it has helped both the neoclassical and the new growth theories to adapt and evolve. The research on convergence has established new stylized facts regarding cross-country growth regularities. It has brought to fore the existence of large technological and institutional differences across countries and has given rise to new methodologies for quantifying and analyzing these differences. This is providing a new information base for analysis of technological and institutional diffusion and for further development of growth theory in general. [ABSTRACT FROM AUTHOR]

This paper draws attention to some possible misunderstandings concerning the place of long-run outcomes in growth theory. It argues that the traditional emphasis on these outcomes is often misguided. As a result of this emphasis, too much attention is paid to the role of knife-edge assumptions, and researchers may be led to interpretations of the evidence, or models of the growth process, that are not wholly sensible. [ABSTRACT FROM AUTHOR]

The nature of the relationship between economic development and the environment has been discussed since the 1960s, yet opinion remains divided. This paper provides a comprehensive analysis of the relationship between economic growth and environmental degradation and begins by reviewing the largely theoretical discussions from the limits to growth debate of the 1970s to the advent of sustainable development inthe 1980s. The paper then examines the recent studies that have subjected the growth - environment relationship to a statistical analysisthrough the estimation of environmental Kuznets curves (EKCs). The extent to which these studies indicate a decoupling of environmental damage from growth is considered and reasons are suggested why some environmental indicators appear to improve with growth whilst others deteriorate. In order to illustrate the need to interpret EKCs carefully, forecasts of global emissions are made, for the period 1990-2020, for two pollutants that EKCs suggest are being decoupled from economic growth. Policy implications are then discussed. [ABSTRACT FROM AUTHOR]

This paper empirically studies the relationship between public debt and economic growth for selected emerging market economies by performing panel data estimations. The results reveal a statistically significant positive correlation between public debt and the subsequent growth rate of per capita gross domestic product ( GDP). Population and investment are also positively correlated with per capita growth, whereas the initial level of real GDP per capita exerts a negative influence on growth, implying conditional convergence. Other variables such as the inflation rate, the trade balance or the exchange rate do not yield a statistically significant effect with respect to economic growth. [ABSTRACT FROM AUTHOR]

In the coming years, the share of the working-age population in the total population will start to decline in all countries of the European Union. All other things remaining equal, this so-called demographic burden will have a downward effect on economic growth. This paper examines whether the Europe 2020 employment targets would be sufficient to compensate for the downward impact of demographic burden and whether the impact of demography on economic growth differs between EU countries and between urban and rural regions. The results show that raising employment rates to the Europe 2020 targets can restore positive opportunities for economic growth, but not in all countries and only to a limited extent. They also show that even though urban and rural regions differ in terms of population growth and growth of the working age population, the prospects for demographic burden are highly similar for both types of regions. [ABSTRACT FROM AUTHOR]

This paper provides a survey of the recent progress in the literature of financial development and economic growth. The survey highlights that most empirical studies focus on either testing the role of financial development in stimulating economic growth or examining the direction of causality between these two variables. Although the positive role of finance on growth has become a stylized fact, there are some methodological reservations about the results from these empirical studies. Several key issues unresolved in the literature are highlighted. The paper also points to several directions for future research. [ABSTRACT FROM AUTHOR]

The recent empirical growth literature has proposed three underlying fundamental determinants of economic growth, namely, physical geography, economic integration and institutional quality. This paper unpacks the final determinant into both political-economic institutions as well as the primarily political institution of democratic development. Using both cross-sectional and panel datasets, we show that, properly instrumented, there is no evidence that democracies grow faster or slower than non-democracies. This result is in contrast to much of the more recent literature, which tends to find a weakly positive relationship. Political- economic institutions, however, remain positive and significant determinants of economic growth, which corroborates much of the empirical evidence in the existing literature. Copyright © 2008 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]

This paper presents a critical review of evolutionary and new growth theories. The purpose is to discuss the often-made claim that the two approaches, both inspired by Schumpeter's seminal work, are becoming more and more similar in terms of the sources and mechanisms of the growth process on which they focus. According to this argument, some kind of theoretical convergence between the two paradigms is taking place. Differently from previous surveys of the field, this paper compares evolutionary and new growth theories by focusing on their major theoretical foundations. The discussion leads to the conclusion that the two approaches greatly differ with respect to all of their main theoretical building blocks, and that no convergence between the two paradigms is therefore taking place. This finding should be welcomed by both evolutionary and new growth scholars, because it is the process of interaction and the fruitful exchange of ideas between different approaches that lead to advances in growth theory, not their convergence to a common paradigm. [ABSTRACT FROM AUTHOR]

This paper sets the contributions to this issue in the context of a large and rapidly growing literature. It argues, on theoretical and empirical grounds, that future research should focus on transitional growth dynamics. [ABSTRACT FROM AUTHOR]

This paper reviews the mainstream, resource economics, and ecological economics models of growth. A possible synthesis of energy-based and mainstream models is presented. This shows that when energy is scarce it imposes a strong constraint on the growth of the economy; however, when energy is abundant, its effect on economic growth is much reduced. The industrial revolution released the constraints on economic growth by the development of new methods of using coal and the discovery of new fossil fuel resources. Time-series analysis shows that energy and GDP cointegrate, and energy use Granger causes GDP when capital and other production inputs are included in the vector autoregression model. However, various mechanisms can weaken the links between energy and growth. Energy used per unit of economic output has declined in developed and some developing countries, owing to both technological change and a shift from poorer quality fuels, such as coal, to the use of higher quality fuels, especially electricity. Substitution of other inputs for energy and sectoral shifts in economic activity play smaller roles. [ABSTRACT FROM AUTHOR]

This paper reviews the literature on economic development as it relates to indigenous people in the United States and Canada, and focuses on how institutions affect economic development of reservation and reserve economies. Evidence shows that strong property rights to reservation and reserve land and natural resources, whether communal or individual, are and always have been important determinants of productivity. Political and legal institutions that are perceived as stable and predictable to tribal members and to non-Natives also improve economic opportunities for indigenous people living on reservations and reserves. Research reviewed here also shows that culture and acculturation are important in the development process. Although our emphasis is on North America, the findings are applicable to indigenous people in other parts of the world and shed light on growth questions that loom large for developing countries around the world. [ABSTRACT FROM AUTHOR]

This paper presents three sets of results about equilibrium bias of technology. First, I show that when the menu of technological possibilities only allows for factor-augmenting technologies, the increase in the supply of a factor induces technological change relatively biased toward that factor—meaning that the induced technological change increases the relative marginal product of the factor becoming more abundant. Moreover, this induced bias can be strong enough to make the relative marginal product of a factor increasing in response to an increase in its supply, thus leading to an upward-sloping relative demand curve. I also show that these results about relative bias do not generalize when more general menus of technological possibilities are considered. Second, I prove that under mild assumptions, the increase in the supply of a factor induces technological change that is absolutely biased toward that factor—meaning that it increases its marginal product at given factor proportions. The third and most important result in the paper establishes the possibility of and conditions for strong absolute equilibrium bias—whereby the price (marginal product) of a factor increases in response to an increase in its supply. I prove that, under some regularity conditions, there will be strong absolute equilibrium bias if and only if the aggregate production function of the economy fails to be jointly concave in factors and technology. This type of failure of joint concavity is possible in economies where equilibrium factor demands and technologies result from the decisions of different agents. [ABSTRACT FROM AUTHOR]

The development of financial systems is very often characterised by the development of innovative financial contracts which allow a more efficient allocation of resources and a higher level of capital productivity and economic growth. By exploiting the microeconomic theory of the optimal financial contract under asymmetric information, economists have recently managed to shed new light on the well studied issue of the relationship between financial market development and economic growth. This paper reviews the most recent progress of this literature which shows that the amount of information asymmetry in the credit market and the degree of heterogeneity between borrowers (typically firms) and lenders (typically workers or savers) determine the nature of the financial system. Differences in endowments and in the level of information distribution can give rise to very different financial contracts which affect, and in turn are affected, by capital accumulation and growth. [ABSTRACT FROM AUTHOR]

Taxing agriculture to mobilize resources for industrialization has been a widely used development strategy. Using novel cross-country time-series data sets with direct measures of agricultural taxation, we examine how a policy bias against agriculture affects the speed of convergence in income per capita, structural change, and economic growth. We find that distortionary agricultural policies in poor economies can account for the emergence of convergence clubs in our sample by significantly retarding their structural transformation and economic growth. Overall, we find no evidence suggesting that policies that discriminate against agriculture have been beneficial for long-term economic growth. [ABSTRACT FROM AUTHOR]

Cross-sectional studies of growth in post-colonial Africa have overwhelmingly focussed on explaining the failure of growth in Africa. This prompting stylised fact has its qualifications and when these are taken into consideration the explanations of African economic growth appear incoherent. The notion of a chronic African growth failure has diverted attention from the process of economic growth and left important questions unaddressed. The quest for the African dummy has delivered transferable conclusions with a strong impact on the writing of African economic history. This critical survey of the literature argues that African economic performance needs to be evaluated from a different perspective. Copyright © 2009 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]

Institutional change in water rights in the nineteenth century Australian colony of Victoria raised institutional efficiency, which contributed to long-run economic growth. High-quality human capital and the extension of voting rights (franchise) were crucial for efficient institutional change in the water sector. Quality human capital (literacy) appeared to increase the rural population's awareness of the economic impact of the existing structure of water rights that may have constrained growth in the agricultural sector and reduced investment incentives. Extension of the franchise allowed the rural population to exert political pressure for enactment of change in water rights, which resulted in efficiency-enhancing policies and efficient institutions. The findings show these two factors were more important than Victoria's British colonial heritage in determining whether growth-enhancing institutional change took place. [ABSTRACT FROM AUTHOR]

The two-level CES aggregate production function—that nests a CES into another CES function—has recently been used extensively in theoretical and empirical applications of macroeconomics. We examine the theoretical properties of this production technology and establish existence and stability conditions of steady states under the Solow and Diamond growth models. It is shown that in the Solow model the sufficient condition for a steady state is fulfilled for a wide range of substitution parameter values. This is in sharp contrast with the two-factor Solow model, where only an elasticity of substitution equal to one is sufficient to guarantee the existence of a steady state. In the Diamond model, multiple equilibria can occur when the aggregate elasticity of substitution is lower than the capital share. Moreover, it is shown that for high initial levels of capital and factor substitutability, the effect of a further increase in a substitution parameter on the steady state depends on capital–skill complementarity. [ABSTRACT FROM AUTHOR]

Results derived from evaluations using different measures for China's economic growth are divergent, especially when the RMB exchange rate has experienced large depreciation. Focusing on the changes in the RMB exchange rate matching the demands of economic development, we offer some plausible explanations for the variations in the evaluation results. The significant gaps between different economic performance evaluation results before the mid-1990s, and evidence from international comparisons of factor productivity indicate that the quality of economic growth in China is different from that of other economies. Evaluation of economic development should take into account both quantitative expansion and qualitative improvement. From this perspective, evaluation results indicate qualitative improvement in the Chinese economy after the mid-1990s. [ABSTRACT FROM AUTHOR]

The relationship between income inequality and economic growth is estimated using dynamic panel estimation on a sample covering 112 emerging countries for the period 1980-2014. The results show that income inequality has a positive influence on economic growth for richer countries, in line with the classic theory, and a negative effect for poorer countries, as argued by the political economy approach. Copyright © 2017 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]

I analyze a model of strategic interdependence between two economies linked by investments in defensive capital for deterrence purposes. I adapt a two-agent dynamic setting where weapon production affects consumption. Individually both economies determine their balanced growth path by taking this interdependence into account in different grades of awareness. I associate two types of equilibria with internal or external determinants for defense production analogous to scenarios of arms build-up or arms race. I find that a defense sector is compatible with economic growth but a tight arms race can harm growth. [ABSTRACT FROM AUTHOR]

We analyse the evolution of beer consumption between countries and over time. Historically, there have been major changes in beer consumption in the world. In recent times, per capita consumption has decreased in traditional beer drinking countries while it increased strongly in emerging economies. Recently, China has overtaken the US as the largest beer economy. A quantitative empirical analysis studies the relationships among economic growth, globalisation and beer consumption. The relationship between income and beer consumption has an inverse U-shape. Beer consumption initially increases with rising incomes; but at higher levels of income beer consumption falls. Increased globalisation has contributed to a convergence in alcohol consumption patterns across countries. In countries that were originally beer drinking countries, the share of beer in total alcohol consumption reduced, while this is not the case in countries which traditionally drank mostly wine or spirits. [ABSTRACT FROM AUTHOR]

SUMMARY The neoclassical model of economic growth is used to model the economic growth of a HIV-infected community with efforts in controlling the epidemic. An optimal control model with pure-state constraints is formulated and investigated. It is found that reduction of prevalence for the disease and economic growth agrees in a positive sense in the communities with high rate of population growth and low income. Moreover, the same control strategy will decrease the prevalence even if the capital is not growing for the case of high income communities. However, a disease control strategy with economic growth as its objective will not result in decrease in prevalence if the rate of population growth of the community is very low. Therefore, if the rate of the population growth of a community is nearly the replacement level, then the utility function for the selection of disease control strategies should not be an economic benefit. Copyright © 2013 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]

We use the perpetual inventory method to estimate gross fixed capital stock at the provincial level in Indonesia. We employ a relatively long series of past annual investments at constant prices for 1983-2007 and a province-specific survival function for capital. For this purpose, we use published data on provincial income accounts, input-output tables, and surveys from existing studies. Capital was found to be over-concentrated in the Java-Bali region and inefficiently distributed among provinces. This distribution contributed to national growth in the majority of the sample years. [ABSTRACT FROM AUTHOR]

Consumer research has extensively analysed psychological determinants of customer satisfaction. As macro-level customer satisfaction data were not available until recently, researchers have only taken first steps towards analysing economic determinants of customer satisfaction. Based on a more complex conceptual framework and on data from Germany and Japan, this article examines how economic processes influence the perceived value of goods and services, quality expectations and customer satisfaction. Using principal component analysis, regression analysis and structural equation modelling, this study finds that perceived value is positively influenced by both economic growth and lagged economic expectations. Customer satisfaction is positively influenced by economic growth and negatively by current economic expectations, with half of the impact mediated by perceived value. Economic expectations positively influence expectations regarding the quality of goods and services. These results imply that consumer researchers should no longer ignore economic influences on consumer attitudes. Marketing managers are advised to be cautious not to misinterpret economic-induced variations in customer satisfaction as caused by corporate performance. [ABSTRACT FROM AUTHOR]

Despite extensive economic reforms during the late 1980s/early 1990s, Latin America's saving rates remain low. This article examines the saving behaviour of 18 Latin American countries in the 1976-2000 period and compares it with that of 25 other developing countries. It finds that lower inflation, income growth and increased real interest rates on deposits have not had the expected effects on saving rates in Latin America. Instead, the determinants of saving behaviour appear to differ between the two groups of countries, and saving rates are affected by a degree of inertia. Although more research is needed, this indicates that the focus of the neoliberal economic reforms of the 1980s was misplaced. [ABSTRACT FROM AUTHOR]

South Africa has undergone a remarkable transformation since its democratic transition in 1994, but economic growth and employment generation have been disappointing. Most worryingly, unemployment is currently among the highest in the world. While the proximate cause of high unemployment is that prevailing wages levels are too high, the deeper cause lies elsewhere, and is intimately connected to the inability of the South African to generate much growth momentum in the past decade. High unemployment and low growth are both ultimately the result of the shrinkage of the non-mineral tradable sector since the early-1990s. The weakness in particular of export-oriented manufacturing has deprived South Africa of growth opportunities as well as of job creation at the relatively low end of the skill distribution. Econometric analysis identifies the decline in the relative profitability of manufacturing in the 1990s as the most important contributor to the lack of vitality in that sector. [ABSTRACT FROM AUTHOR]

The pursuit of high economic growth is considered desirable as it generates an increase in a nation's wealth, income, employment and output. The rising income should enable consumers to purchase more goods and services, which in turn should result in enhanced utility and subjective happiness. Empirical studies suggest that higher income resulting from high rates of economic growth contribute to poverty alleviation and life satisfaction in low income countries. Higher income raises the happiness of the poor. In developed countries, higher income does not seem to “buy” higher happiness, once a threshold level of income is reached. This exploratory study seeks to examine the quantitative and qualitative sources of happiness. A higher absolute level of income is found to be significantly related to subjective happiness. Among the non-income factors, family togetherness, a good working environment and a higher level of education can contribute to making people happier. Happiness thus involves more than just economic growth and income. [ABSTRACT FROM AUTHOR]

The growing body of literature devoted to studying the impact of inequality on economic growth has centered its attention on the income distribution effect, even though the theoretical relationships are more related to assets distribution. While some recent studies have tried to overcome this limitation by introducing asset indicators, they meet new constraints when dealing only with time-invariant measurements for this explanatory variable. This article provides a theoretical discussion and some novel empirical tests to better understand the relationships between assets distribution and economic growth. We assembled a new panel database that includes observations for more than 30 countries over the last three decades. The data include a time-varying variable for changes in the Land Gini index over this period that enables us to overcome the limitations of previous studies. A system general method of moments (GMM) estimator is used to generate truly unbiased and consistent estimates for the parameters of interest. We explore some of the likely channels through which asset distribution and economic growth may be linked, paying particular attention to the role of secure property rights and the relations between land ownership and education. We find robust and significant negative signs for land inequality in the growth regressions, indicating that changes in asset distribution are an important factor for economic development. [ABSTRACT FROM AUTHOR]

The estimated static welfare gains from international trade are very small, on the order of one percent of GDP. The case for free trade is therefore increasingly linked to trade’s apparent positive effects on economic growth. But how large are these growth effects? The vast empirical literature has emphasized the statistical significance, not the economic significance, of the trade-growth relationship. This survey’s re-examination of the empirical literature focuses on the size of the relationship between trade and growth. Our survey reveals that the many empirical studies are surprisingly consistent in terms of the size of the relationship: A one percentage point increase in the growth of exports is associated with a one-fifth percentage point increase in economic growth. Given the power of compounding, the effect of trade on growth is very important for human welfare. [ABSTRACT FROM AUTHOR]