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THREE ESSAYS CONCERNING THE RELATIONSHIP BETWEEN EXPORTS, MACROECONOMIC POLICY, AND ECONOMIC GROWTHSheridan, Brandon James 01 January 2012 (has links)
This dissertation consists of three essays that collectively investigate the relationship between exports, macroeconomic policy and economic growth. The first essay investigates the relationship between disaggregated exports and growthto address why many developing countries rely on primary goods as their main source of export income when evidence suggests they could earn higher returns by exporting manufactured goods.Using regression tree analysis, I find that although increasing manufacturing exports is important for sustained economic growth, this relationship only holds once a threshold level of development is reached. The results imply that a country needs a minimum level of education before it is beneficial to transition from a reliance on primary exports to manufacturing exports.
Thesecond essay explores the impact of fiscal episodes on the extensive and intensive margins of exports for a sample of OECD countries. In general, a fiscal stimulus in an exporting country is associated with a substantial decrease in each margin. However, a fiscal consolidation in an exporting country is associated with a large increase in the extensive margin, yielding a positive net effect on total exports. This positive effect of a consolidation disappears when an importing country simultaneously experiences a fiscal episode. Overall, the effect of fiscal episodes on total exports and the export margins yield important ramifications for policy-makers.
The third essay takes a broad perspective in characterizing the relationship between disaggregated exports, macroeconomic policy, and economic growth. Few studies consider that macroeconomic policy may influence growth, at least partly, through the export channel and none consider that this impact may differ for primary and manufacturing exports. I first explore the determinants of disaggregated exports to empirically test whether macroeconomic policy influences the size of the export sector in a country. Second, I use simultaneous equations methods to identify the impact of macroeconomic policy and exports on economic growth. Indeed, there appears to be some evidence that macroeconomic policy may affect the level of exports. Moreover, exports appear to exert an influence on growth, but the role of macroeconomic policy in the growth process seems to be only through its influence on other variables.
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