Trade Openness Reduces Growth Volatility When Countries are Well Diversified

26 Pages Posted: 18 May 2013

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: May 2013

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.

L'ouverture du commerce réduit la volatilité de la croissance quand les pays sont bien diversifiés. Ce texte examine les mécanismes par lesquels l'ouverture du commerce affecte la volatilité de la croissance. A l'aide de diverses mesures de concentration des exportations, on fait état de résultats robustes tendant à montrer le rôle important de la diversification des exportations dans le conditionnement de l'effet d'ouverture du commerce sur la stabilité de la croissance. On montre que l'ouverture a un effet négatif sur la volatilité de la croissance dans une proportion significative de pays qui ont des paniers d'exportations relativement diversifiés.

JEL Classification: F15, F43

Suggested Citation

Haddad, Mona and Lim, Jamus Jerome and Pancaro, Cosimo and Saborowski, Christian, Trade Openness Reduces Growth Volatility When Countries are Well Diversified (May 2013). Canadian Journal of Economics/Revue canadienne d'économique, Vol. 46, Issue 2, pp. 765-790, 2013, Available at SSRN: https://ssrn.com/abstract=2266775 or http://dx.doi.org/10.1111/caje.12031

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

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
0
Abstract Views
413
PlumX Metrics