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Trading Partner Volatility And The Ability For A Country To Cope: A Panel Gmm Model, 1970-2005

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  • EDWARDS, Jeffrey

Abstract

This paper explores how six indicators of domestic and global development, influence the dissemination of volatility in trading partner growth rates. Using a dynamic panel, fixed-effects, system GMM methodology, I find that for the most part, developing countries can indeed cushion their economies from fluctuations in trading partner growth by increasing depth and diversification both domestically and globally. On the other hand, I also find that while developed countries seem to already be insulated from such fluctuations, increases in the same variables will actually increase a country's susceptibility to trading partner volatility.

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  • EDWARDS, Jeffrey, 2009. "Trading Partner Volatility And The Ability For A Country To Cope: A Panel Gmm Model, 1970-2005," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 9(2).
    • Handle: RePEc:eaa:aeinde:v:9:y:2009:i:2_1
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    More about this item

    Keywords

    Volatility; Development; Diversification; GMM;
    All these keywords.

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations

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