Introduction

Abstract

There is no doubt that economic growth is not only the single most important subject in economic science but also the main vehicle for raising the living standards of thousands of millions of people in the world. Also, economists have long recognized the gains from international trade. So, is international trade, or more broadly, globalization, related to economic growth? It might be fair to say that most, if not all, economists believe that globalization and economic growth are intimately related and, furthermore, that globalization has brought enormous benefits for many countries and people. This belief seems justified if we look at the long-run historical experience of the world economy. Each of the two waves of globalization, the first corresponding to the period from the late nineteenth century to World War I and the second corresponding to the post-World War II period, was accompanied by high rates of growth of the world economy, by historical standards. The inter-war years witnessed a world-wide increase in protectionism and decline in trade, as well as stagnation of economic growth. © 2012 Shujiro Urata, Chin Hee Hahn and Dionisius Narjoko.