International trade Research Paper Example | Topics and Well Written Essays - 2000 words

Inter countryal trade - Research Paper ExampleHowever like both supposition this connection between trade and economic growth and between trade and poverty capacity be empiric ally verified. If such a relation holds true then it exit automatically interpret a ground for the stagnant economies and the developing nations to remove trade barriers and introduce incentives to facilitate the same. Even the certain countries pursue protectionist policies on products related to agriculture, textiles and steel, which are, imported from the less developed nations. Initially the international organizations were pressuring the developing nations to modify their economies on the basis of structural adjustment loans. Currently their policies are changing as their attention shifts much towards the developed nations with respect to the removal of trade barriers in nations like Canada, EU and Japan. (Spanu, May 2003, p.1) The basis of all these lie in the theory of trade as an engine of growt h and as a measuring towards reduction of poverty. Most of the literatures studied are in the context of developing or emerging economies. It will be interesting to study the impact of trade in the context of a developed nation like USA, which has recently undergone a vulnerable state of its economy. Hence it is important to empirically verify this theory through the study.Next the theory of trade as an engine of growth might be considered at the background of our research as already mentioned before. According to Adam Smith, David Ricardo and their followers, the secret of Englands wealth reside in trade related activities carried out by the ancient sailors. Without the occurrence of trade, the economy would have remained a closed one with poor living standards, which could gradually lead to the downfall of the economy. According to Smith, trade widen the size of the market, promoted specialization and generated prosperity through its gains. (Mehmet, 44) In