Effects of Terms of Trade and its Volatility on Economic Growth: A Cross Country Empirical Investigation

Syed tehseen, jawaid and Abdul, waheed (2011): Effects of Terms of Trade and its Volatility on Economic Growth: A Cross Country Empirical Investigation. Forthcoming in: Transition Studies Review , Vol. 17,

Abstract

This study examines the effects of terms of trade and its volatility on economic growth for a sample of 94 developed and developing countries, using five year average annual data from 2004 to 2008. The cross country ordinary least square estimation results indicate significant positive effect of terms of trade on economic growth. Furthermore, volatility of terms of trade has significant positive effect on economic growth. To test the robustness of initial results, sensitivity analysis has been performed using different additional variables, sample size and various proxies of volatility variable. The initial results were found robust despite the inclusion of various variables in the basic model and use of various proxies for volatility of terms of trade.

• Item Type: MPRA Paper
• Language: English
• Keywords: Terms of trade, Volatility, Economic Growth
• Subjects: F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F42 - International Policy Coordination and Transmission; F - International Economics > F1 - Trade > F13 - Trade Policy ; International Trade Organizations; D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D80 - General

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