Date of Award
Michalis Nikiforos, Ph.D.
The dawn of neoliberalism brought with it a litany of trade policies for developing nations, including recommendations to liberalize trade barriers, remove capital controls, and develop in relative comparative advantages in the global economy. These policies were buttressed with Computable General Equilibrium models that showed positive welfare gains for liberalizing nations. This paper reviews the historical record around trade policy, theories of trade, as well as the methodological approaches used to examine the effects of trade liberalization in the neoliberal era. It posits an alternative using Stock-Flow-Consistent modeling methods, looking particularly at the case of Ghana and its own tariff regime. Drawing from heterodox traditions, such as Marxist, Structuralist, and Post-Keynesian tendencies, alternative assumptions and modeling techniques are utilized to examine the effects of trade liberalization on a developing country. The basic conclusion is that there is historical and theoretical evidence that protectionism can aid in the sectoral development of a nation’s industries. Additional modeling recommendations and avenues for further research are given as well, concluding that there is still much to be developed for open economy macro-modeling in the development context.
Karlewicz, Harrison J., "Growth and Sectoral Development: A Stock-Flow-Consistent Model of the Effects of Trade Liberalization in Ghana" (2019). Masters of Science in Economic Theory and Policy. 18.