Question

what does international trade contribute to nations growth ? explain two points​

Answer 1

International trade, as the Romer model suggests, increases the total size of the market, raises the level of output, leads to an increased learning-by-doing, and hence, contributes to economic growth.

Answer 2

Answer:

Explanation:

This study is an attempt to test the hypothesis “international trade contributes to economic growth through its effects on human capital accumulation.” To assess the hypothesis empirically, we employed the extended Neo-Classical growth model that reflects some features of the endogenous growth models. We thus ended up with a model in which the change in human capital is sensitive to change in trade policies. Unlike conventional approaches, the model serves to assess and determine the impact of international trade on the accumulation of human capital. The empirical analysis estimates dynamic panel growth equations by using a data-set of nine Asian countries, over the period 1972–2012. The overall evidence substantiates the fact that in countries under consideration, international trade enhances the accumulation of human capital and contributes to economic growth positively through human capital accumulation.