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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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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 39040.

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Date of creation: 2012
Date of revision:
Handle: RePEc:pra:mprapa:39040
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  1. Andrew K. Rose, 2002. "Do We Really KNow that the WTO Increases Trade?," Working Papers 182002, Hong Kong Institute for Monetary Research.
  2. Andrei A. Levchenko & Julian di Giovanni, 2008. "Trade Openness and Volatility," IMF Working Papers 08/146, International Monetary Fund.
  3. Acemoglu, Daron & Zilibotti, Fabrizio, 1997. "Was Prometheus Unbound by Chance? Risk, Diversification, and Growth," Journal of Political Economy, University of Chicago Press, vol. 105(4), pages 709-51, August.
  4. Eduardo A. Cavallo, 2007. "Output Volatility and Openness to Trade: A Reassessment," Research Department Publications 4518, Inter-American Development Bank, Research Department.
  5. Ann Harrison & Andrés Rodríguez-Clare, 2009. "Trade, Foreign Investment, and Industrial Policy for Developing Countries," NBER Working Papers 15261, National Bureau of Economic Research, Inc.
  6. Haddad, Mona E. & Lim, Jamus Jerome & Saborowski, Christian, 2010. "Trade openness reduces growth volatility when countries are well diversified," Policy Research Working Paper Series 5222, The World Bank.
  7. Andrew B. Bernard & Stephen Redding & Peter K. Schott, 2006. "Multi-Product Firms and Trade Liberalization," CEP Discussion Papers dp0769, Centre for Economic Performance, LSE.
  8. David H. Romer & Jeffrey A. Frankel, 1999. "Does Trade Cause Growth?," American Economic Review, American Economic Association, vol. 89(3), pages 379-399, June.
  9. repec:oup:qjecon:v:119:y:2004:i:2:p:612-645 is not listed on IDEAS
  10. John Romalis, 2007. "Market Access, Openness and Growth," NBER Working Papers 13048, National Bureau of Economic Research, Inc.
  11. James Feyrer, 2011. "Distance, Trade, and Income -- The 1967 to 1975 Closing of the Suez Canal as a Natural Experiment," 2011 Meeting Papers 1438, Society for Economic Dynamics.
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