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Once Again, is Openness Good for Growth?

Author/Editor: Lee, Ha Y. | Ricci, Luca Antonio | Rigobón, Roberto
Authorized for Distribution: July 1, 2004
Electronic Access: Free Full Text (PDF file size is 386KB)
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Disclaimer: This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate.

Summary: Rodriguez and Rodrik (2000) argue that the relation between openness and growth is still an open question. One of the main problems in the assessment of the effect is the endogeneity of the relation. In order to address this issue, this paper applies the identification through heteroskedasticity methodology to estimate the effect of openness on growth while properly controlling for the effect of growth on openness. The results suggest that openness would have a positive effect on growth, although small. This result stands, despite the equally robust effect from growth to openness.
 
Series: Working Paper No. 04/135
Subject(s): Trade policy | Economic growth | Economic models
Author's keyword(s): Trade openess | economic growth | endogeneity | identification through heteroskedasticity
 
English  
    Published:   July 1, 2004        
    ISBN/ISSN:   1934-7073   Format:   Paper
    Stock No:   WPIEA1352004   Pages:   29
    Price:   US$15.00
       
     
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