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

Edsel Beja

MPRA Paper from University Library of Munich, Germany

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.

Keywords: Economic openness; trade openness; financial openness; domestic economy; income (search for similar items in EconPapers)
JEL-codes: B50 E10 F00 F40 O50 (search for similar items in EconPapers)
Date: 2009-08-01, Revised 2009-08-01
New Economics Papers: this item is included in nep-sea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Working Paper: Things are different when you open up: Economic openness, domestic economy, and income (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:16552

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