Great ratios and international openness

Juin-jen Chang, Chang-Ching Lin and Hsieh-Yu Lin

International Review of Economics & Finance, 2016, vol. 41, issue C, 110-121

Abstract: The great ratios have been regularly used to calibrate the long-run properties of theoretical macroeconomic models; yet their stationarity is not supported by empirical studies unequivocally. This paper empirically tests whether the international openness governs the stationarity of the great ratios. By considering 21 OECD countries, our results show that the countries with relatively high openness are less likely to exhibit a balanced-growth-path equilibrium. By controlling for a potential endogeneity problem, the great ratios are less likely to be stationary if the economy runs a surplus trade balance.

Keywords: Great ratios; International trade; Balanced-growth-path equilibrium; Structural variables (search for similar items in EconPapers)
JEL-codes: C20 E20 O50 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1059056015001446
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:41:y:2016:i:c:p:110-121

DOI: 10.1016/j.iref.2015.09.002

Access Statistics for this article

International Review of Economics & Finance is currently edited by H. Beladi and C. Chen

More articles in International Review of Economics & Finance from Elsevier
Bibliographic data for series maintained by Catherine Liu ().