Trade Policy and Economic Development: How We Learn

Abstract

AbstractThe following sections are included:Evolution of Theory, Understanding, and PolicyThe Early YearsAccepted Stylized Facts and PremisesInitial PoliciesResulting Evolution of PoliciesResearch Directions and ContributionsEast Asian ExperienceHow Did Economists and Researchers Go Wrong?Misapplication of Good TheoryNegative ResultsGood Theory Assuming Counterfactual SituationsWhat Research Contributed to Improved PoliciesChallenging the Stylized Facts and Understanding How Import-Substitution Regimes WorkedRefinement and More Appropriate Interpretation of TheoryDemonstration of the Viability of Alternative Trade PoliciesWhat Lessons can be Learned for Research in New Applied Fields?References