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Growth volatility and trade: evidence from the 1967-1975 closure of the Suez Canal

  • Parinduri, Rasyad

This paper examines the effects of trade on economic growth and growth volatility. Using the 1967-1975 closure of the Suez Canal as an instrument for trade, I find that trade leads to higher economic growth, and lower probability of recession or economic slowdown. There is no evidence that trade reduces growth volatility, however.

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File URL: https://mpra.ub.uni-muenchen.de/39040/1/MPRA_paper_39040.pdf
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 39040.

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Date of creation: 2012
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Handle: RePEc:pra:mprapa:39040
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  1. James Feyrer, 2009. "Distance, Trade, and Income - The 1967 to 1975 Closing of the Suez Canal as a Natural Experiment," NBER Working Papers 15557, National Bureau of Economic Research, Inc.
  2. David H. Romer & Jeffrey A. Frankel, 1999. "Does Trade Cause Growth?," American Economic Review, American Economic Association, vol. 89(3), pages 379-399, June.
  3. Rose, Andrew K, 2002. "Do We Really Know that the WTO Increases Trade?," CEPR Discussion Papers 3538, C.E.P.R. Discussion Papers.
  4. Andrew Bernard & Stephen Redding & Peter Schott, 2009. "Multi-Product Firms and Trade Liberalization," Working Papers 09-21, Center for Economic Studies, U.S. Census Bureau.
  5. Harrison, Ann & Rodríguez-Clare, Andrés, 2010. "Trade, Foreign Investment, and Industrial Policy for Developing Countries," Handbook of Development Economics, Elsevier.
  6. Haddad, Mona & Lim, Jamus Jerome & Pancaro, Cosimo & Saborowski, Christian, 2012. "Trade openness reduces growth volatility when countries are well diversified," Working Paper Series 1491, European Central Bank.
  7. Acemoglu, Daron & Zilibotti, Fabrizio, 1996. "Was Prometheus Unbound by Chance? Risk, Diversification and Growth," CEPR Discussion Papers 1426, C.E.P.R. Discussion Papers.
  8. Eduardo A. Cavallo, 2008. "Output Volatility and Openness to Trade: a Reassessment," ECONOMIA JOURNAL OF THE LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION, ECONOMIA JOURNAL OF THE LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION, vol. 0(Fall 2008), pages 105-152, September.
  9. Julian di Giovanni & Andrei A. Levchenko, 2009. "Trade Openness and Volatility," The Review of Economics and Statistics, MIT Press, vol. 91(3), pages 558-585, August.
  10. John Romalis, 2007. "Market Access, Openness and Growth," NBER Working Papers 13048, National Bureau of Economic Research, Inc.
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