Does trade integration imply growth in Latin America? Evidence from a dynamic spatial spillover model

F. Blasques, P. Gorgi, Siem Jan Koopman and James Sampi
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F. Blasques: Vrije Universiteit Amsterdam
P. Gorgi: Vrije Universiteit Amsterdam

No 23-007/IVI, Tinbergen Institute Discussion Papers from Tinbergen Institute

Abstract: To investigate the role of intra-regional trade integration on economic growth in Latin America, we develop a multilevel spatial production network model with time-varying parameters. The theoretical model is established for a multi-country and multi-sectoral economy. The reduced-form econometric framework relies partly on observation-driven dynamic processes. The finite-sample properties of the maximum likelihood estimates are investigated through a Monte Carlo study. The empirical study is for six countries in Latin America. The findings suggest that intra-country spillovers configure an important factor for explaining growth, while the importance of domestic spillovers is limited. The growth volatility is substantively reduced since 2005.

Keywords: Spatial network model; multilevel model; time-varying parameters; economic modeling; trade liberization; growth. (search for similar items in EconPapers)
JEL-codes: C31 C32 F14 F43 (search for similar items in EconPapers)
Date: 2023-02-24
New Economics Papers: this item is included in nep-int
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Persistent link: https://EconPapers.repec.org/RePEc:tin:wpaper:20230007

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