Foreign trade policy and its impact on economic growth

Abstract

The empirical research on the various effects of international trade in periods of a steady world economy, crisis phenomena and post-crisis recovery enables the formation of generalized principles of foreign trade policy aimed at economic growth. The purpose of the paper consists in the determination of the impact of foreign trade factors on economic growth in each of the periods of the economic state and the substantiation of the hypothesis regarding the expediency of adapting foreign trade to the economic situation in the country. The authors of the paper use the tool of fuzzy neural networks for spatial data for 82 countries of the world at time intervals of stability, crisis and post-crisis recovery. This made it possible to find a rational approach to the formation of foreign trade guidelines under different macroeconomic conditions. The results of the research revealed that during periods of a steady economy, the maximization of realistically achievable rates of economic growth (about 10-20%) occurs at average and relatively equal levels of export and import (from 30% to 60%). At the same time, a potential surge in the rate of economic growth may be achieved due to a reduction in the level of exports while maintaining the average level of imports. During crisis phenomena, countries that have limited imports and maintained the average level of export of their products are the most stable, and the potential opportunities for increasing the rate of economic growth are seen in the increase of imports to the pre-crisis level. During post-crisis recovery, the greatest potential rates of economic growth are achieved with the maximum possible increase in exports and a reduction in the level of imports. It is determined that the export of high-tech products is an influential factor in economic growth. However, its level should be rationally adapted to the macroeconomic conditions and the structure of international trade, based on the theory of mercantilism.