On the dynamic Measurement of Economic Openness

Author(s): 
Publication Date: 
01 September 2009
Publisher: 
Elsevier
Publication Language: 
English
Appearing in: 
Journal of Policy Modelling
Volume: 
31
Issue: 
5
Pages: 
731-736
DOI: 
10.1016/j.jpolmod.2009.03.001
Abstract: 

he empirical relationship between economic openness and economic performance is much debated in the economic literature. No definitive conclusions seem to be reached yet, part of the problem being the very measurement of economic openness of a national economy. In their article in the Journal of Policy Modeling, Ruíz Estrada & Yap (2006) propose a new method to measure economic openness and to empirically assess the openness–growth nexus as a new tool for policy-makers: the Openness Growth Monitoring Model (OGM-Model). The authors claim: (i) that their method is different from and more flexible than existing empirical methods, (ii) that higher levels of openness do not lead to income growth, and (iii) that customs unions perform better than free trade areas. This short article challenges the three claims of the authors.