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Title:Trade openness and vulnerability in Central and Eastern Europe PDF Logo
Authors:Montalbano, Pierluigi
Federici, Alessandro
Triulzi, Umberto
Pietrobelli, Carlo
Issue Date:2005
Series/Report no.:Research Paper, UNU-WIDER, United Nations University (UNU) 2005/43
Abstract:This paper offers a substantive contribution to the debate on the role of international trade on the development of emerging countries. The aim is to detect empirically the phenomenon of vulnerability induced by trade openness. The methodology adopts a forward-looking approach and tries to fill a missing link in the theory between trade shocks, volatility, and the wellbeing of countries, distinguishing between ‘normal’ and ‘extreme’ volatility. The analysis is focused on Europe, in consideration of the dramatic and unprecedented trade liberalization process experienced by the Central and Eastern European countries at the beginning of the 1990s. The main result of the analysis is that in spite of the apparent association between trade openness and good macroeconomic performance, Eastern European countries have experienced a worsening of their macroeconomic wellbeing because of the trade shocks of the early 1990s. This preliminary evidence, remarkably strong also in the case of the poorest sections of the population, spurs some relevant policy implications, both at the national and supranational levels.
Subjects:international trade
vulnerability
volatility
Central and Eastern European countries
JEL:C82
E17
F40
ISBN:929190726X
Document Type:Working Paper
Appears in Collections:WIDER Research Papers, United Nations University (UNU)

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