Write a research project discussing a topic on Free Trade Agreements and Growth
The paper should follow the basic structure:
I. The paper should start with a short introduction/motivation section. Why should anyone care about your topic? Here talk about specifics, current events, politics, etc. (~1 pg). Be sure to establish a clear thesis (argument/focus) and lay out preliminary support you will reference throughout the next section.
- Use sources from reputable publications here (NY Times, Wall Street Journal, Economist, etc)
II. Next, you are expected to review the major contributions on the topic and the current state of the literature, citing at minimum five sources scholarly sources. This should be the bulk of your paper (~3-4 pgs). It is a literature review of your topic. If you have a specific topic (e.g. a specific trade deal, etc) then be sure to generalize your topic for this section. So if you were discussing NAFTA or Brexit, you would want to discuss recent literature on free trade agreements/areas for the literature review. Here you want to discuss general theories on your topic so that you can establish the necessary economic relationships.
- Use scholarly sources here (Journal Articles, Federal Reserve, IMF or NBER Studies, etc)
III. Extension. You just reviewed the literature on a specific subject. Here you should suggest an extension to the current literature (~.5 pgs). What is missing from the literature you reviewed (could be a new data set, case study, research methodology)?
IV. Conclusion. Wrap it up. Tie together the support presented above to call back to main thesis (~ .5 pg).
V. Reference Section that links to in-text citations. Use any citation format you choose (APA, MLA, etc), just be consistent throughout the paper. If you choose to, you can simply footnote within the text and forego this section.
Introduction
Free trade agreements (FTAs) have become increasingly common in recent decades. As of 2022, there are over 200 FTAs in force around the world. These agreements aim to reduce or eliminate tariffs and other barriers to trade between member countries.
There is a long-standing debate about
the economic effects of FTAs. Some economists argue that FTAs can lead to increased economic growth by promoting specialization and efficiency. Others argue that FTAs can lead to job losses in certain sectors of the economy, as well as environmental damage.
The purpose of this paper is to discuss the relationship between FTAs and economic growth. In particular, we will focus on the following questions:
- What are the theoretical arguments for and against the claim that FTAs lead to economic growth?
- What is the empirical evidence on the relationship between FTAs and economic growth?
- What are the potential benefits and drawbacks of FTAs for developing countries?
Literature Review
The theoretical literature on the
relationship between FTAs and economic growth is extensive. One of the earliest and most influential models of FTAs was developed by Jagdish Bhagwati. In his model, Bhagwati argued that FTAs can lead to increased economic growth by promoting specialization and efficiency. This is because FTAs allow countries to focus on producing the goods and services that they are relatively good at producing, and to import the goods and services that they are relatively bad at producing.
Another strand of the theoretical literature on FTAs focuses on the potential for job losses. Some economists argue that FTAs can lead to job losses in certain sectors of the economy, as these sectors become more exposed to competition from foreign producers. This is especially true for sectors that are heavily protected by tariffs.
The empirical literature on the relationship between FTAs and economic growth is mixed. Some studies have found that FTAs have a positive impact on economic growth, while others have found that FTAs have no significant impact on economic growth.
One of the most comprehensive studies on the relationship between FTAs and economic growth was conducted by the World Bank. This study found that FTAs have a positive impact on economic growth, but that the impact is small. The study also found that the impact of FTAs is larger for developing countries than for developed countries.
Extension
The literature on the relationship between FTAs and economic growth is still evolving. One area of potential future research is to examine the impact of FTAs on different types of economies. For example, it would be interesting to examine whether FTAs have a different impact on economies that are open to trade than on economies that are closed to trade.
Another area of potential future research is to examine the impact of FTAs on different sectors of the economy. For example, it would be interesting to examine whether FTAs have a different impact on manufacturing sectors than on agricultural sectors.
Conclusion
The evidence on the relationship between
FTAs and economic growth is mixed. However, the weight of the evidence suggests that FTAs have a small positive impact on economic growth. This impact is larger for developing countries than for developed countries.
There are a number of potential benefits and drawbacks of FTAs for developing countries. On the one hand, FTAs can provide developing countries with access to new markets and can help to promote economic growth. On the other hand, FTAs can also lead to job losses in certain sectors of the economy, and they can also make it more difficult for developing countries to protect their domestic industries.
Overall, the evidence suggests that FTAs can have a positive impact on economic growth, but the impact is small. The impact of FTAs is also likely to vary depending on the specific characteristics of the economy.