Exposure to external country specific shocks and income volatility
Carolina Lennon and
No ERSD-2009-04, WTO Staff Working Papers from World Trade Organization (WTO), Economic Research and Statistics Division
We show that exposure to country specific shocks has a positive and significant impact on GDP volatility. In particular, we find that the degree to which the cycles of different trading partners are correlated is more important in explaining exporters’ GDP volatility than the volatility of demand in individual export market. We also show that geographical diversification is a significant determinant of countries' exposure to country specific shocks.
Keywords: Income volatility; geographical export diversification; external shocks (search for similar items in EconPapers)
JEL-codes: C23 F43 O19 (search for similar items in EconPapers)
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Working Paper: Exposure to External Country Specific Shocks and Income Volatility (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:wtowps:ersd200904
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