In distinguishing exactly how trade impacts growth, Wacziag (2001) employs a simultaneous equations model and finds three significant channels through which trade impact growth. Which of the following is not one of those channels?

Question

Quizplus · Accepted Answer

The three significant channels through which trade impacts growth according to Wacziag (2001) are: trade causing investment to increase, trade increasing foreign direct investment (FDI), and trade improving macroeconomic policy quality. Reducing black market premiums is not one of the channels identified by Wacziag.

In Distinguishing Exactly How Trade Impacts Growth, Wacziag (2001) Employs