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Heitger, Bernhard
Year of Publication: 
Series/Report no.: 
Kiel Working Paper 260
For a long time economists have been presuming a strong and positive relationship between a country's engagement in international trade and its economic performance. Already Adam Smith stressed the importance of trade as a means of widening markets, thereby increasing the division of labour and thus raising the level of productivity; John Stuart Mill on the other side laid greater emphasis on the dynamic effects of international trade (called indirect effects) . Thus it was generally believed that countries with a high engagement in international trade perform much better than countries that protect their home markets - the latter not being able to make use of the benefits of trade as a source of economic growth.
Document Type: 
Working Paper

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