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Exports and Economic Growth of East European Economies, 1996–2007

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Money, Banking and Financial Markets in Central and Eastern Europe

Abstract

The argument whether export causes growth dates back to Ricardo and the comparative advantage. According to this theory, free trade increases the production of traded goods due to lower costs for each country. The assumption that the goods are ‘normal goods’ ensures that lower prices induced by increased production increase the utility of the citizens of each trading partner. Of course, in order to increase production in the export sector, the production of other sector(s) must be reduced. The ‘logical’ choice is therefore the production of imported goods. Needless to say, in order for trade to occur, the trading countries must engage in both the import and export of goods. The net effect of increased exports and imports is positive, resulting in increased production, which is defined as growth.

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Authors
  1. Shahdad Naghshpour
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  2. Bruno S. Sergi
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Editor information

Editors and Affiliations

  1. Centre for EMEA Banking, Finance and Economics, London Metropolitan University, UK

    Roman Matousek (Director) (Director)

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© 2010 Shahdad Naghshpour and Bruno S. Sergi

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Naghshpour, S., Sergi, B.S. (2010). Exports and Economic Growth of East European Economies, 1996–2007. In: Matousek, R. (eds) Money, Banking and Financial Markets in Central and Eastern Europe. Palgrave Macmillan Studies in Banking and Financial Institutions. Palgrave Macmillan, London. https://doi.org/10.1057/9780230302211_9

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