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Three Measures of Trade Dependence: A Critique

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  • Johnston, Paul V.

Abstract

Economists use various trade dependence indexes as an aggregate measure for comparing across countries the importance of trade and the influence of trade policy. Two commonly used indexes, the trade/GDP index and the export/GDP index, lack mathematical attributes necessary to accurately represent trade dependence. A new index developed in this report, the "trade dependence index" (TDI), should better serve the needs of trade researchers. The TDI unambiguously specifies a country's trade dependence on a scale between zero and 100. Moreover, for any degree of trade dependence there is only one index value.

Suggested Citation

  • Johnston, Paul V., 1992. "Three Measures of Trade Dependence: A Critique," Staff Reports 278633, United States Department of Agriculture, Economic Research Service.
    • Handle: RePEc:ags:uerssr:278633
    DOI: 10.22004/ag.econ.278633
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    References listed on IDEAS

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