Does Openness Imply Greater Vulnerability

摘要: This paper provides an empirical evaluation of external vulnerability using panel data methods for a worldwide sample countries. Controlling domestic conditions, the examines growth volatility effects outcome measures trade and financial openness as well four types foreign shocks: terms changes, trading partners' rates, international real interest rate net regional capital inflows. The analyzes possibility non-linearities by allowing to vary with general level economic development letting shocks depend on degree integration. results are mixed regarding integration: while opening tends increase volatility, reduces directly indirectly dampening shocks.