Trade liberalization and economic growth in Guyana
The primary objective of this study is to examine for Guyana the effects of trade liberalization policies on the growth of real GDP while controlling for other factors such as education, exports, labor, and capital formation.
DATA/METHOD:
The data for this study on Guyana will cover the period 1974 to 2011.That data are taken from various sources including the following: (a) the International Financial Statistics by the International Monetary Fund; (b) the Bank of Guyana Statistical Bulletin and the Annual Report published by the Bank of Guyana; and (c) the UNESCO Institute for Statistics at the United Nations, Educational, Scientific, and Cultural Organization.
Three unrestricted error correction models will be used to study the relationship between income performance and trade liberalization as measured by a dummy variable and the average import tariff collection rate, respectively. Model 1 will relate real income to capital formation, labor, education, exports and a dummy variable, representing the adoption of measures to liberalize trade. Model 2 will relate real income to capital formation, labor, education, exports, and the second measure of trade liberalization, the average import tariff collection rate. Model 3, meanwhile, will relate real income to capital formation, labor, education, exports, the dummy variable and the average import tariff collection rate. These models are show below.
RESULTS/EXPECTED RESULTS:
In these models, the estimated coefficient for the dummy variable and for the variables on education, exports, capital formation and labor are all expected to be positive. The estimated coefficient for the average import tariff rate is however expected to be negative.