ABSTRACT
The nature of the linkages between trade openness, finance, and economic growth needs to be examined in the context of the recent research suggesting that excessive economic openness may no longer support economic growth. The relevant literature on the impact of integration on economic growth and ‘catch-up’ is ambiguous. Membership of the European Union (EU) requires free movement of capital and payments among the member states, and between the EU members and third countries. Poland significantly increased its financial integration after the collapse of the socialist regime. Similarly to trade flows, the Europe Agreement enhanced this process. The Index of Economic Freedom is a compound measure of a country’s economic environment. The Heritage Foundation assesses 186 countries in terms of 12 freedoms, including market openness which consists of three freedoms: trade, investment, and financial freedom. A high level of economic growth is often associated with increasing openness to the international exchange of goods and services.
