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A Convex Hull Approach to Counterfactual Analysis of Trade Openness and Growth

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  • Michael Funke

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  • Marc Gronwald

    ()

Abstract

In this paper, we apply a convex hull approach to counterfactual analysis of trade openness and growth. The experiments we choose evaluate the importance of trade openness for growth across African countries. Specifically, we ask the question "what would happen if African countries were more open?". The evidence indicates that several countries don´t fall within the convex hull of the observed data and therefore counterfactual inferences are risky. This conclusion is at odds with the literature arguing that greater trade openness would unequivocally lead to higher growth in Africa.

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Bibliographic Info

Paper provided by Hamburg University, Department of Economics in its series Quantitative Macroeconomics Working Papers with number 20906.

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Date of creation: Jun 2009
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Handle: RePEc:ham:qmwops:20906

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Keywords: openness; economic growth; robustness; counterfactuals; convex hull;

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