Basic Graph

Time Series for the Whole World

Average Growth Rate

0.06

0.08

0.10

Baseline Growth

0.02

0.04

Openness Effect

-0.02

0.00

1980

1985 Year

1990

We can see that average GDP growth is not completely procyclical with average trade openness, as some free market proponents might have thought. In fact, one might wonder if there is any relationship at all.

Average Growth & Average Trade Openness Growth

1979 0.10 1980 1987 0.08 1988 1978

Average GDP Growth

0.06

1981 0.04 1985 1976 1991

1986

1977

1984

0.02

1992 0.00 1982

-0.02

1990 1989 1983 0.01 0.02 0.03 0.04 0.05

Average Trade Openness Growth

Here we can see more of a positive relationship between average trade openness and average growth. But the relationship is still dispersed. Notice many of the values in the upper right hand corner are earlier years.

Decomposition of Regional GDP and Trade Openness Growth

Time Series for Asia

0.12 Average Growth Rate 0.06 0.08 0.10

Baseline Growth

0.02

0.04

Trade Effect 0.00

1980

1985 Year

1990

Here we see that the two are very countercyclical two each other. Moreover, the growth rates are extremely volatile.

Time Series for Latin America

0.10

Baseline Growth Average Growth Rate 0.05

Trade Effect 0.00 -0.05

1980

1985 Year

1990

Here, the two seem to be highly procyclical early on but then turn countercyclical after 1985.

Time Series for Mideast

0.12 Average Growth Rate 0.06 0.08 0.10

Baseline Growth

0.02

0.04

Trade Effect

-0.02

0.00

1980

1985 Year

1990

Time Series for Africa

Average Growth Rate

0.06

0.08

0.10

Baseline Growth

0.02

0.04

Trade Effect 0.00 -0.02

1980

1985 Year

1990

Time Series for Europe

0.15 Average Growth Rate 0.10

0.05

Baseline Growth

0.00

Trade Effect

1980

1985 Year

1990