Trade Openness Reduces Volatility When Countries Are Well Diversied

• Tác giả: Mona E Haddad
• Ngôn ngữ: eng
• Ký hiệu phân loại: 330 Economics
• Thông tin xuất bản: 2012
• Bộ sưu tập: Tài liệu truy cập mở
• ID: 328102
• Chủ đề: 1. AGGREGATE LEVEL; 2. AMERICAN ECONOMIC REVIEW; 3. APPLIED RESEARCH; 4. AVERAGE GROWTH; 5. AVERAGE GROWTH RATE

Tóm tắt

This paper addresses the mechanisms by which trade openness affects growth volatility. Using a diverse set of export diversification indicators, it presents strong evidence pointing to an important role for export diversification in reducing the effect of trade openness on growth volatility. The authors also identify positive thresholds for product diversification at which the effect of openness on volatility changes sign. The effect is shown to be positive only for a minority of countries with highly concentrated export baskets. This result is shown to be robust to both explicit accounting for endogeneity as well as the inclusion of a host of additional controls.