Free Trade Essay Example | Topics and Well Written Essays - 3000 words

Free Trade - Essay Example Privatisation; this means transfer of past public owned organisation services and goods to private sector Limited intervention; governments should not interfere with markets expect in building infrastructure. Unembroidered market prices; this implies that governments will desist from controlling market prices. Export - led development; this are development strategies that emphasize export and foreign trade instead of protecting domestic industry. (Dornbusch, pp.69-85) Do open market economies grow faster than closed ones Many studies on market economics have argued that open trade system enhances a faster growth of economy. The point for this strong favour in terms of open trade is based on studies and on a conclusion that outward- based economies realize faster growth rates than those economies that are inward oriented. However, this seems to be overstated, as Dornbusch, (pp.69-85) observers, currently the advantages of open markets are being oversold continuously in the related literatures and in the IMF and World Bank publications. Yet, it is hard to understand the advantages of liberalization of markets among market economies. Economists reports that the effects of openness are very complicated and general mixed as to what extend the trade polices impact the growth of economy. More so the fact that studies explain trade openness in different ways makes it hard to classify countries depending on their level of trade openness. Thus, it does not come as a surprise when different results are obtained when different measures are used. (Dornbusch, pp.69-85) The correlation between free market and the economic growth of a country is a hotly debated issue in the trade and development literature. Until now, this issue remains unresolved. It is important... This essay stresses that the correlation between free market and the economic growth of a country is a hotly debated issue in the trade and development literature. Until now, this issue remains unresolved. It is important to note that, many literatures on this topic have put a lot of attention on the correlation between trade policies and economic growth instead of emphasizing trade levels and growth. This paper makes a conclusion that free trade or open trade is characterized by removal of trading barriers between countries. This is meant to stimulate more trading between countries which is faster and without any hindrance. The policy makers of these policies argue that free trade leads to higher economic growth in countries. However, free trade policies advanced by the IMF and the WB has lead to poor and middle economic countries to experience more economic hardships brought about by stiffer monetary policies. Some of the economies collapsed or stalled. A good example is the Asian crisis. Keeping in mind all the arguments presented open trade definitely is a cause of concern and cause of slow economic progress amongst the populace of the world but it is extremely important to remember that it is not the only cause of concern, some of the policies undertaken by states are implemented incorrectly which result in growing poverty and economic hardship being witnessed in many countri es especially African states. However, it cannot be stated that liberalization or open market is the ONE and ONLY cause of increase in economic hardships amongst the world’s populace.