Measuring Links between Openness and Growth
Konstantino Galinis, Monitor Company
The paper estimates the link between volatility of a country's GDP growth and several control variables, including how open a country is to international trade. It is hypothesized that countries which are more open to international trade will experience less volatility in GDP growth. Using a fixed effects model, we present empirical evidence which supports this hypothesis for 56 developing countries, but not for the developed countries. The paper uses a data set which covers some 79 countries over the period 1960 to 1990. Implications are drawn for Canada and the US.