The Impact of International Trade on Economic Growth: TANZANIA

Abstract

In this paper, we examine the studies, since Adam Smith, on the impact of commercial and technological aspects, resulting from international trade, on the physical accumulation and quality of productive factors. We remark that the theory of economic growth and the theory of international trade, during the ‘classic period’, constituted two inseparable branches of economics. In this epoch, it was believed that international trade has a positive effect on the economic growth. Later, during the ‘neoclassic period’, these two theories of the economic thought became autonomous relatively to each other. Consequently, the importance of international trade was neglected in the context of economic growth, especially until the 1960’s. Recently, with the introduction of models of endogenous growth, both theories have merged again. The modelling frameworks advanced by the new models, as well as the recent developments inside the international trade theory, has allowed us to obtain a better understanding of the relation between economic growth and international trade.