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Markets for risk and openness to trade: how are they related?

  • Svaleryd, Helena
  • Vlachos, Jonas

It has long been argued that trade restrictions can be motivated by insurance considerations in the absence of full risk diversification. Recent literature suggests that markets for risk can alleviate resistance to reform and protectionist lobby group pressure. We empirically address the hypothesis that institutions which affect domestic risk reduction can facilitate liberal trade policy and show that there exists a robust positive relationship between openness to trade and the development of financial markets.

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Article provided by Elsevier in its journal Journal of International Economics.

Volume (Year): 57 (2002)
Issue (Month): 2 (August)
Pages: 369-395

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Handle: RePEc:eee:inecon:v:57:y:2002:i:2:p:369-395
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/505552

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