Jansen, Marion Lennon, Carolina Piermartini, Roberta
Year of Publication:
WTO Staff Working Paper No. ERSD-2009-04
World Trade Organization (WTO), Geneva
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.
Income volatility geographical export diversification external shocks