Revisiting the Effect of the Great Liberalization on the Growth of Latin America and the Caribbean, 1980-2010

Abstract

Revisiting the effect of the great liberalization on the growth of Latin America and the Caribbean, 1980-2010 / Federico Merchán, Mauricio Mesquita Moreira. p. cm. -(IDB Working Paper Series ; 1099) Includes bibliographic references.

Trading Promises for Results: What Global Integration Can Do for Latin America and the Caribbean

“…Both cases suggest trade liberalization has a positive impact on per capita income growth, even more so in the region than in the rest of the world. 10 These hints of causality seem to be confirmed in a study that filters out the influence of other growth-related factors, whether observable (e.g., education and institutions) or not (see Merchán and Mesquita Moreira, 2019b). Due to the shortcomings explained above, it avoids using binary 10 The correlation coefficient between tariff percentage change and annual GDP per capita growth for the whole sample is -0.3, statistically significant at the 5 percent level, -0.41 (at the 10 percent level) for Latin America and -0.28 (10 percent level) for the rest of the world.…”

“…See Irwin (2019) for a review of the recent contributions to this literature. 16 Merchán and Mesquita Moreira (2019b). 17 See Coe and Helpman (1995) and Keller (2010) for trade-related spillovers based on macro data.…”

“…The Latin American countries are: Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, the Dominican Republic, Ecuador, Guatemala, Honduras, Mexico, Nicaragua, Panama, Peru, Paraguay, El Salvador, Uruguay, and venezuela. See Merchán and Mesquita Moreira (2019b) for the technical details of the exercise.…”

“…The input tariffs are weighted averages of tariffs applied on goods used as inputs, with the weights coming from Eora input-output matrices. See Merchán and Mesquita Moreira (2019b) for details of the data building and econometric results. 16 Confidence intervals are a range of values that has 95% probability of including the actual impact.…”