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Inflation and Trade Openness Revised: an Analysis Using Panel Data

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  • Adolfo Sachsida
  • Mário Jorge Cardoso de Mendonça

Abstract

n this article we estimate the relationship between inflation and trade openness [e.g., Romer (1993)] using modern panel data techniques. The advantage here is that we are able to explicit test the hypothesis proposed by Terra (1998) that the negative relationship between openness and inflation is due to severely indebted countries in the debt crisis period. The econometric results give support to Romer (1993) showing that the negative relationship between inflation and openness are neither restrict to a subset of countries or a time period. Neste artigo é estimada a relação entre inflação e abertura comercial [e.g., Romer (1993)] usando a metodologia de dados em painel. A vantagem desse método é a possibilidade de testar com maior grau de acuidade a hipótese sugerida por Terra (1998) de que a relação negativa entre abertura e inflação se deve à presença, na amostra, de países severamente endividados durante o período da crise da dívida externa. Os resultados econométricos dão suporte aos achados de Romer (1993), mostrando que a relação negativa entre abertura comercial e inflação não está restrita a um subconjunto de países e nem a um específico período de tempo.

Suggested Citation

  • Adolfo Sachsida & Mário Jorge Cardoso de Mendonça, 2015. "Inflation and Trade Openness Revised: an Analysis Using Panel Data," Discussion Papers 0162, Instituto de Pesquisa Econômica Aplicada - IPEA.
    • Handle: RePEc:ipe:ipetds:0162
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