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Markets for Risk and Openness to Trade: How are they Related?

  • Svaleryd, Helena

    (Department of Economics)

  • Vlachos, Jonas

    ()

    (Dept. of Economics, Stockholm School of Economics)

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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File URL: http://swopec.hhs.se/hastef/papers/hastef0327.pdf
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Paper provided by Stockholm School of Economics in its series SSE/EFI Working Paper Series in Economics and Finance with number 327.

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Length: 36 pages
Date of creation: 22 Jun 1999
Date of revision: 10 Sep 2000
Publication status: Published in Journal of International Economics, 2002, pages 396-395.
Handle: RePEc:hhs:hastef:0327
Contact details of provider: Postal:
The Economic Research Institute, Stockholm School of Economics, P.O. Box 6501, 113 83 Stockholm, Sweden

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