“What is the contribution of economic openness and the domestic economy to income?” is tested using quantity measures of trade, finance, and domestic economic base. The short answer is: “It depends”. Africa and the Americas lose from both trade and financial openness. Asia gains from trade openness but not from financial openness. The industrialized region benefits from both trade and financial openness. In all regions, the domestic economic base compensates for any adverse effects of economic openness. The overall experience with openness could still be enhanced with healthier external and domestic engagements, especially with the latter increasing its relative role in economies. The case study on the Philippines finds that its economy gains from trade and financial openness but not from its domestic economic base. In this case, economic progress is difficult because the gains from external engagement are wiped out by the losses from domestic economy disengagement.
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number
16552.
Find related papers by JEL classification: F40 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - General F00 - International Economics - - General - - - General B50 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - General O50 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - General E10 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - General
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