Managing Openness and Volatility : The Role of Export Diversification

• Tác giả: Mona Haddad
• Ngôn ngữ: eng
• Ký hiệu phân loại: 338.9 Economic development and growth
• Thông tin xuất bản: World Bank, Washington, DC, 2012
• Bộ sưu tập: Tài liệu truy cập mở
• ID: 319789
• Chủ đề: 1. COMPARATIVE ADVANTAGE; 2. DEMAND SHOCKS; 3. DEVELOPED COUNTRIES; 4. DEVELOPING COUNTRIES; 5. DEVELOPMENT STRATEGY

Tóm tắt

As developing countries look to embrace an outward-oriented growth strategy, some may be concerned about the possibility that increased openness will be accompanied by increased volatility. However, although a more open economy may face increased volatility in its terms of trade, openness confers diversification benefits. In this note, authors argue that export diversification is a key mitigating factor for the total effect of openness on volatility. More specifically, authors show that most developing countries fall on the "good" side of a diversification threshold, where they are likely to experience less volatility as they pursue a strategy of greater openness.