THE INFLUENCE OF THE COMMODITY COMPOSITION OF TRADE ON ECONOMIC-GROWTH

Empirical evidence supports the proposition that national income growth is strongly affected by trade specialization and comparative advantage in eight economic sectors. Commercial policy distortions and factor intensity reversals explain why trade does not always fit the skilled labor continuum underlying sectors ranked along the ladder of development. Income elasticities with respect to openness imply that economies become less dependent on international markets as they grow. This article examines the effects of the commodity composition of trade on economic growth, going beyond previous analytical efforts investigating international trade and domestic growth linkages.