Does Trade Openness Reduce Inflation? Empirical Evidence from Pakistan

Does Capital Account Openness Lower Inflation?

Can Openness to Trade Reduce Income Volatility? Evidence from Colonial India’s Famine Era∗

Whether openness to trade can be expected to reduce or exacerbate the equilibrium exposure of real income to productivity shocks remains theoretically ambiguous and empirically unclear. In this paper we exploit the expansion of railroads across India between 1861 to 1930—a setting in which agricultural technologies were rain-fed and risky, and regional famines were commonplace—to examine whethe...

Openness and Inflation: Theory and Evidence*

Because unanticipated monetary expansion leads to real exchange rate depreciation, and because the harms of real depreciation are greater in more open economies, the benefits of unanticipated expansion are decreasing in the degree of openness. Models in which the absence of precommitment in monetary policy leads to excessive inflation therefore predict lower average inflation in more open econo...

Openness and inflation volatility: Panel data evidence

Trade openness can reduce inflation volatility through limiting recourse to seigniorage during periods of temporary fiscal deficits, and by shifting consumption and production towards goods for which the terms of trade are relatively stable. This paper provides evidence for a negative effect of openness on inflation volatility using a dynamic panel model that controls for the endogeneity of ope...

Does More International Trade Openness Worsen Inequality

Does freer trade increase income inequality within countries, perhaps sufficiently to offset any benefits to the poor from higher overall per capita income? Figure 4 suggests that there is no simple association between changes in trade openness and changes in inequality. Certainly there are many well known cases of countries where inequality has risen as they became more integrated into the wor...