TY  - BOOK
AU  - Prasad,Eswar
AU  - Kose,Ayhan
AU  - Prasad,Eswar
AU  - Terrones,Marco
TI  - How Do Trade and Financial Integration Affect the Relationship Between Growth and Volatility?
T2  - IMF Working Papers; Working Paper
SN  - 1451860382 :
SN  - 1018-5941
PY  - 2005///
CY  - Washington, D.C.
PB  - International Monetary Fund
KW  - Financial Aspects of Economic Integration
KW  - imf
KW  - Financial Integration
KW  - International Trade and Financial Linkages
KW  - Macroeconomic Volatility and Growth
KW  - Open Economy Macroeconomics
KW  - Trade Integration
KW  - Burkina Faso
KW  - Cameroon
KW  - Dominican Republic
KW  - Iran, Islamic Republic of
KW  - Mexico
N2  - The influential work of Ramey and Ramey (1995) highlighted an empirical relationship that has now come to be regarded as conventional wisdom-that output volatility and growth are negatively correlated. We reexamine this relationship in the context of globalization-a term typically used to describe the phenomenon of growing international trade and financial integration that has intensified since the mid-1980s. Using a comprehensive new data set, we document that, while the basic negative association between growth and volatility has been preserved during the 1990s, both trade and financial integration significantly weaken this negative relationship. Specifically, we find that, in a regression of growth on volatility and other controls, the estimated coefficient on the interaction between volatility and trade integration is significantly positive. We find a similar, although less significant, result for the interaction of financial integration with volatility
UR  - http://elibrary.imf.org/view/IMF001/03137-9781451860382/03137-9781451860382/03137-9781451860382.xml
UR  - http://www.imfbookstore.org/IMFORG/9781451860382
ER  -