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Things are different when you open up: Economic openness, domestic economy, and income

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  • Beja, Edsel Jr.

Abstract

“What is the contribution of economic openness and the domestic economy to income?” is tested using quantity measures of trade, finance, and domestic economic base. The short answer is: “It depends”. Africa and the Americas lose from both trade and financial openness. Asia gains from trade openness but not from financial openness. The industrialized region benefits from both trade and financial openness. In all regions, the domestic economic base compensates for any adverse effects of economic openness. The overall experience with openness could still be enhanced with healthier external and domestic engagements, especially with the latter increasing its relative role in economies. The case study on the Philippines finds that its economy gains from trade and financial openness but not from its domestic economic base. In this case, economic progress is difficult because the gains from external engagement are wiped out by the losses from domestic economy disengagement.

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  • Beja, Edsel Jr., 2009. "Things are different when you open up: Economic openness, domestic economy, and income," MPRA Paper 16552, University Library of Munich, Germany, revised 01 Aug 2009.
    • Handle: RePEc:pra:mprapa:16552
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    Cited by:

    1. Edsel L. Beja Jr, 2011. "Do international remittances cause Dutch disease?," Migration Letters, Migration Letters, vol. 8(2), pages 132-140, October.

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    More about this item

    Keywords

    Economic openness; trade openness; financial openness; domestic economy; income;
    All these keywords.

    JEL classification:

    • F40 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - General
    • F00 - International Economics - - General - - - General
    • B50 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - General
    • O50 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - General
    • E10 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - General

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