Publication: Managing Openness and Volatility : The Role of Export Diversification
Date
2010-03
ISSN
Published
2010-03
Author(s)
Haddad, Mona
Lim, Jamus Jerome
Saborowski, Christian
Abstract
As developing countries look to embrace
an outward-oriented growth strategy, some may be concerned
about the possibility that increased openness will be
accompanied by increased volatility. However, although a
more open economy may face increased volatility in its terms
of trade, openness confers diversification benefits. In this
note, authors argue that export diversification is a key
mitigating factor for the total effect of openness on
volatility. More specifically, authors show that most
developing countries fall on the "good" side of a
diversification threshold, where they are likely to
experience less volatility as they pursue a strategy of
greater openness.
Citation
“Haddad, Mona; Lim, Jamus Jerome; Saborowski, Christian. 2010. Managing Openness and Volatility : The Role of Export Diversification. Economic Premise; No. 6. © World Bank, Washington, DC. http://openknowledge.worldbank.org/entities/publication/c45a052f-adce-5b59-891a-639dd11f1d33 License: CC BY 3.0 IGO.”