Trade Openness Reduces Growth Volatility when Countries are well Diversified

44 Pages Posted: 22 Nov 2012

See all articles by Mona Haddad

Mona Haddad

World Bank - EASPR

Jamus Jerome Lim

World Bank

Cosimo Pancaro

European Central Bank (ECB)

Christian Saborowski

International Monetary Fund (IMF)

Multiple version iconThere are 3 versions of this paper

Date Written: November 8, 2012

Abstract

This paper addresses the mechanisms by which trade openness affects growth volatility. Using a diverse set of export concentration measures, we present strong evidence pointing to an important role for export diversification in conditioning the effect of trade openness on growth volatility. Indeed, the effect of openness on volatility is shown to be negative for a significant proportion of countries with relatively diversified export baskets.

Keywords: export diversification, growth volatility, trade openness

JEL Classification: F15, F43, O24

Suggested Citation

Haddad, Mona and Lim, Jamus Jerome and Pancaro, Cosimo and Saborowski, Christian, Trade Openness Reduces Growth Volatility when Countries are well Diversified (November 8, 2012). ECB Working Paper No. 1491, Available at SSRN: https://ssrn.com/abstract=2172798

Mona Haddad (Contact Author)

World Bank - EASPR ( email )

United States

Jamus Jerome Lim

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Cosimo Pancaro

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

Christian Saborowski

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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