Export instability and the domestic economy: Questions of causality

Abstract

The conventional view concerning the impact of export instability on the domestic economies of developing countries is one of pessimism. Export instability is thought to adversely affect the short‐run stability and longer‐run growth of income. Empirical evidence on these matters is, however, inconclusive. This article applies a Granger/Sims reduced form approach to examining whether export instability generates short‐run instability in domestic income. For each of a sample of 20 trade‐dependent countries the results obtained strongly support the contention that export instability induces short‐run macroeconomic instability.

Cite this work

No public copy is stored for this record, so only the metadata is cited.

Stored only when both papers are in the corpus — 31 citations exist upstream.

Papers that cite the same references — the relational fallback while embeddings are still backfilling.