As developing countries look to embrace
an outward-oriented growth strategy, some may be concerned
about the possibility that increased openness will be
accompanied by increased volatility. However, although a
more open economy may face increased volatility in its terms
of trade, openness confers diversification benefits. In this
note, authors argue that export diversification is a key
mitigating factor for the total effect of openness on
volatility. More specifically, authors show that most
developing countries fall on the "good" side of a
diversification threshold, where they are likely to
experience less volatility as they pursue a strategy of
greater openness.
Bibliographic Details
| Main Authors: |
Haddad, Mona,
Lim, Jamus Jerome,
Saborowski, Christian |
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| Language: | English |
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| Published: |
World Bank, Washington, DC
2010-03
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| Subjects: | COMPARATIVE ADVANTAGE,
DEMAND SHOCKS,
DEVELOPED COUNTRIES,
DEVELOPING COUNTRIES,
DEVELOPMENT STRATEGY,
DIVERSIFICATION BENEFITS,
DOMESTIC MARKET,
DOMESTIC PRODUCERS,
ECONOMIC MANAGEMENT,
ECONOMIC POLICY,
ECONOMIC RESOURCES,
EMPIRICAL MODEL,
EXPORT BASE,
EXPORT DIVERSIFICATION,
EXPORT MARKET,
EXPORT SECTOR,
EXPORT SHARE,
EXPORT SHARES,
EXPORTS,
FINANCIAL CRISIS,
FOREIGN MARKET,
FOREIGN MARKETS,
FOREIGN TECHNOLOGY,
GOVERNMENT ACTION,
GROWTH VOLATILITY,
HOME MARKET,
IMPORT MARKETS,
INCOME GROUP,
INCOMES,
INSURANCE,
INTERMEDIATE INPUTS,
INTERNATIONAL DIVERSIFICATION,
INTERNATIONAL TRADE,
INVESTMENT PORTFOLIO,
LIBERALIZATION,
MARKET ACCESS,
MARKET CONDITIONS,
MARKET DIVERSIFICATION,
MARKET ENTRY,
NATIONAL INCOME,
NEW MARKETS,
OPEN ECONOMY,
OUTPUT,
OVERALL VOLATILITY,
PER CAPITA INCOMES,
POLICY MAKERS,
POLICY RESEARCH,
POVERTY REDUCTION,
PRIVATE SECTOR,
RED TAPE,
RISK MANAGEMENT,
SIGNIFICANT EFFECT,
SPECIALIZATION,
TERMS OF TRADE,
TRADE FACILITATION,
TRADE OPENNESS,
VOLATILITY, |
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| Online Access: | http://documents.worldbank.org/curated/en/2010/03/11999611/managing-openness-volatility-role-export-diversification
https://hdl.handle.net/10986/10203
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