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Yes You Can, Can’t You? A Statistical Comparison of Economic Liberalizations Around the World


  • Tommaso Nannicini
  • Andreas Billmeier


We use a transparent statistical methodology for data-driven case studies—synthetic control methods to investigate the impact of economic liberalization episodes on the pattern of real per capita GDP in a worldwide sample of countries. Economic liberalizations are measured by a widely used indicator that captures the scope of the market in the economy, mainly in terms of openness to international trade. The applied methodology compares the post-liberalization growth of treated (open) economies with the growth of a convex combination of similar but untreated (closed) economies, controlling for time-varying unobservables. We find that opening up the economy had a positive effect in most regions that we can analyze in our framework, but we note that more recent liberalizations (after 1989), mainly in Africa, had no significant impact on growth, indicating either an “early bird” gain from globalization or the lack of complementary policies in some countries.

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  • Tommaso Nannicini & Andreas Billmeier, 2009. "Yes You Can, Can’t You? A Statistical Comparison of Economic Liberalizations Around the World," Working Papers 352, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
  • Handle: RePEc:igi:igierp:352

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    1. Burnside, Craig & Eichenbaum, Martin & Fisher, Jonas D. M., 2004. "Fiscal shocks and their consequences," Journal of Economic Theory, Elsevier, vol. 115(1), pages 89-117, March.
    2. Lippi, Marco & Reichlin, Lucrezia, 1994. "VAR analysis, nonfundamental representations, blaschke matrices," Journal of Econometrics, Elsevier, vol. 63(1), pages 307-325, July.
    3. Eric M. Leeper & Todd B. Walker & Shu-Chun Susan Yang, 2008. "Fiscal Foresight: Analytics and Econometrics," NBER Working Papers 14028, National Bureau of Economic Research, Inc.
    4. Mertens, Karel & Ravn, Morten O, 2008. "The Aggregate Effects of Anticipated and Unanticipated U.S. Tax Policy Shocks: Theory and Empirical Evidence," CEPR Discussion Papers 6673, C.E.P.R. Discussion Papers.
    5. Bagliano, Fabio C. & Favero, Carlo A., 1999. "Information from financial markets and VAR measures of monetary policy," European Economic Review, Elsevier, vol. 43(4-6), pages 825-837, April.
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    Cited by:

    1. Tommaso Nannicini & Roberto Ricciuti, 2010. "Autocratic Transitions and Growth," CESifo Working Paper Series 2967, CESifo Group Munich.

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