# **T&a1e** 2. REAL **GDP OROWTH** RATES

**(in 19 US DoOma)**

|**Rcal GDP**||||||||||||**Anal**|**A%Vea**||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|Growih**rae**<br>1978|1979|19RD|1931|1912|1983|1954<br>|**1931**|1936|**19817**|**19**|1919|**1971W2**|**19W5**|**1911689**|
|**iA) Imemiveradeadimut**|||||||||||||||
|(P'=<br>.<br>**9.3**|-1.7|**0.5**|**-2.9**|**-6.**|42|**S.5**|4.5||**4.3**|**5.3**|6.3|-02|3.0|**5.4**|
|**ldna**<br>*<br>7.7|6.2|7.9|7.4|**_-0A_**|3.3|**6.1**|2.5|4.0|**3.4**|16.0|7.4|**5.3**|3.9|7.7|
|mcxkm<br>**8.2**|9.3|8.4|H.8|**-0.6**|**-42**|3.6|2.6|3.8|**1.5**|**16**|**2.9**|**6.8**|0.7|05|
|**Mro**<br>*<br>2.9|**4.5**|9.1|-2.E|9.3|4.3|43|**63**|**84**|-2.6|**10.4**|**3.5**|-4.6|**35**|j.j|
|**1uek1'***<br>3.3|**409**|40.7|4.2|**49**|**3.8**|5.9|**49**|**3o**|7.2|**3**|**1.2**|2.1|4.9|5.1|
|A<br>**'aa**<br>**6.4**|**3.5**|5.0|2.9|**1.3**|**4.3**|5.7|**4.2**|4.3|**2.3**|**7.5**|**4.2**|3.S|**3.2**|**4.7**|
|**(l) LsaIneemiwke**<br>**adk miudens**|||||||||||||||
|**Cdauhbk**-<br>**8.4**|5.4|4.1|2.1|**1.0**|1.6|**3.5**|**3.3**|6.1|**5.3**|**3.7**|**3.3**|**4.2**|**2.3**|4.6|
|**CIte d1vobIe**<br>**13.9**|**3.**|**40.8**|4.4|**1.5**|-13|**-4.4**|93|**16**|-2.9|**4.4**|-1.1|**4.**|**1.2**|-1.7|
|**bonia **<br>0.4|**-2.1**|**.6D**|2.2|-103|15.1|-1.1|**-50**|23|**_5.5_**|**0.3**|**_4.5_**|-3.1|3.0|**3.2**|
|**Pakian**aW<br>**8.1**|3.7|10.4|7.9|**6.5**|**6.3**|5.e|**7.5**|5.6|**6.5**|7.4|**5.6**|**7.3**|6.4|**6.3**|
|**AVece**<br>7.7|**2.5**|1.9|**4.2**|**-03**|**5.5**|**0.3s**|**3.1**|4.4|**3.6**|**1.3**|3.1|**32**|**3.4**|**3.1**|
|(C) All adiunrm|||||||||||||||
|**Are**<br>'<br>7.0|3.0|3.6|3.5|0.6|**2.3**|**3.5**|**4.0**|**4.4**|**3.1**|4.7|3.7|3.6|3.3|**4.**|

e *** indt, kighe real a_anu** GDP **gawib rave iLrcued.** - **197832 a p-w pem** 19W3-5 is **adjusneo and 199** is **piat-elte piod.** _v_ **Fern ycawL**

**YS Sarc CE±** Y **9n-PAIC** (FYIII4.

**e Woald Bak Dabase (BESTh Nalkid Aeam).**

7. The link between GDP growth and the trade policy reform is verified by estimating standard output growth equations for the two groups of trade adjusters (intensive and less intensive) using pooled data. The dependent variable in the equation is the growth rate in real GDP, and the explanatory vaiables are the average import tariff rate, the real exchange rate, the investmenttGDP ratio and a measure of capacity utilization. It is expected that tariff liberalization, for a given level of investment and capacity utilization, would increase output by inTroving the efficieacy of reso..-c.. use. The average import tariff rate has several advantages as an indicator of trade liberalization. First, it is the major variable that influenced the level of import protection. Second, the average tariff rate is a direct measure of trade policy unlike the measures based on trade flows (e.g., export/GDP ratio). Indicators of trade policy based on trade flows can be misleading since trade intensity can vary across countries for reasons unrelated to the trade policy, e.g., geographical location of the country.<sup>1</sup> ' Second, the tariff rate does w A comparison of export to GDP ratios for Mexico and Jamaica shows that Jamaica is less trade restrictive than Mexico, contrary to the trade reform experience. In general, in cross-country comparisons based on the tradetGDP ratios, small economies turn out to be more open compared to large economies.