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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: http://mpra.ub.uni-muenchen.de/39040/1/MPRA_paper_39040.pdf
File Function: original version
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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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Web page: http://mpra.ub.uni-muenchen.de

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  1. Francisco Alcalá & Antonio Ciccone, 2001. "Trade and productivity," Economics Working Papers 580, Department of Economics and Business, Universitat Pompeu Fabra, revised Jul 2002.
  2. Andrew K. Rose, 2002. "Do We Really KNow that the WTO Increases Trade?," Working Papers 182002, Hong Kong Institute for Monetary Research.
  3. Stephen J Redding & Peter K Schott & Andrew B Bernard, 2007. "Multi-product Firms and Trade Liberalization," 2007 Meeting Papers 44, Society for Economic Dynamics.
  4. Andrei A. Levchenko & Julian di Giovanni, 2008. "Trade Openness and Volatility," IMF Working Papers 08/146, International Monetary Fund.
  5. John Romalis, 2007. "Market Access, Openness and Growth," NBER Working Papers 13048, National Bureau of Economic Research, Inc.
  6. David H. Romer & Jeffrey A. Frankel, 1999. "Does Trade Cause Growth?," American Economic Review, American Economic Association, vol. 89(3), pages 379-399, June.
  7. Eduardo A. Cavallo, 2008. "Output Volatility and Openess to Trade: a Reassessment," JOURNAL OF LACEA ECONOMIA, LACEA - LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION.
  8. 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.
  9. Acemoglu, Daron & Zilibotti, Fabrizio, 1996. "Was Prometheus Unbound by Chance? Risk, Diversification and Growth," CEPR Discussion Papers 1426, C.E.P.R. Discussion Papers.
  10. 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.
  11. 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.
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