Download Research Statement June 2013

Andrei A. Levchenko  Research Statement  June 2013
We live in an era of globalization: ever increasing international integration of goods, capital, and labor
markets. The benefits and costs of increased trade and financial integration in the world today continue to
be hotly debated. My work to date studies several relationships that are important for understanding the
full impact of economic globalization around the world: i) the interplay between international trade and
economic institutions; ii) the impact of trade on macroeconomic fluctuations; and iii) the consequences of
financial integration for growth, volatility, and risk-sharing. My ongoing and future research focuses on
quantitative welfare assessments of the various aspects of globalization: reductions in trade costs, longrun changes in comparative advantage, and migration of labor, among others.
I. International Trade and Economic Institutions
Institutions – quality of contract enforcement, property rights, shareholder protection, and the like – have
received a great deal of attention in recent years. A large body of empirical evidence demonstrates that
institutions have a first-order impact on countries’ long-run economic growth and development, as well as
a variety of other outcomes (see, among many others, La Porta, Lopez-de-Silanes, Shleifer and Vishny,
1998, and Acemoglu, Johnson and Robinson, 2001). Yet the potentially rich interactions between
international trade and economic institutions had not received much attention in existing literature. I
develop this research agenda both theoretically and empirically in a series of papers.
“Institutional Quality and International Trade” (Review of Economic Studies, 2007) proposes a simple
model of international trade in which institutional differences are modeled within the framework of
incomplete contracts. I show that institutional differences as a source of comparative advantage imply,
among other things, that the less developed country may not gain from trade, and factor prices may
actually diverge as a result of trade. I then test empirically whether institutions act as a source of trade,
using data on US imports disaggregated by country and industry. The empirical results provide evidence
of “institutional content of trade:” institutional differences are an important determinant of trade flows.
Having argued that institutional differences affect trade patterns, the rest of my research agenda explores
the opposite question, and examines instead the impact of international trade on institutions. This is an
important question, because it is widely hoped that greater openness will improve institutional quality
through a variety of channels, including reducing rents, creating constituencies for reform, and increasing
incentives to specialize in sectors that demand good institutions (International Monetary Fund 2005,
Johnson, Ostry and Subramanian 2007). Indeed, Rodrik (2000) argues that the greatest growth benefits of
trade liberalization may well come not from the conventional channels, but from the institutional reform
that trade liberalization can engender.
“International Trade and Institutional Change” (Journal of Law, Economics, and Organization,
forthcoming) develops a model in which imperfect institutions create rents for some parties within the
economy, and are a source of comparative advantage in trade. Then, it endogenizes institutional quality
using a simple political economy model in which some groups lobby for rents created by imperfect
institutions. When countries share the same technology, trade leads to a “race to the top” in institutional
quality. Trading partners improve institutions up to the best attainable level after opening, as they
compete to capture the sectors that generate rents. By contrast, when one of the trading partners has a
sufficiently strong technological comparative advantage in the rent-generating good, institutions do not
improve after trade opening in either country. When other sources of comparative advantage are strong
enough, changing institutions will not affect trade patterns, and thus trade does not create an incentive to
improve them. I test these predictions in a sample of 141 countries, and show that countries whose
exogenous geographical characteristics predispose them to exporting in institutionally intensive sectors
enjoy significantly higher institutional quality.
While trade openness does tend to be associated with better institutions in a cross-section of countries, in
practice the relationship between institutions and trade is likely to be much more nuanced. As
documented by both historians and economists, in many instances international trade contributed to a
concentration of political power in the hands of groups that were interested in setting up, or perpetuating,
bad institutions. Thus, it is important to understand under what conditions greater trade openness leads to
a deterioration of institutions, rather than their improvement. In “Trade, Inequality, and the Political
Economy of Institutions” (Journal of Economic Theory, 2009, joint with Quy-Toan Do), we model
institutions as barriers to entry, in a framework that has two key features. First, preferences over entry
barriers differ across firms and depend on firm size: larger firms prefer to set higher barriers to entry, in
order to reduce competition. Second, these barriers are endogenously determined in a political economy
equilibrium. Trade opening can lead to higher entry barriers – worse institutions – when it changes the
political power in favor of a small elite of large exporters, who in turn prefer to install high barriers. The
detrimental effect of trade on institutions is most likely to occur when a small country captures a
sufficiently large share of world exports in sectors subject to rent seeking.
“Comparative Advantage, Demand for External Finance, and Financial Development” (Journal of
Financial Economics, 2007, joint with Quy-Toan Do) examines, both theoretically and empirically, the
impact of international trade on a particular type of economic institution – financial development. A
country’s financial development is an equilibrium outcome of the economy’s productive structure:
financial systems are more developed in countries with large finance-dependent sectors. After trade
opening demand for external finance, and therefore financial development, are higher in a country that
specializes in financially intensive goods. By contrast, financial development is lower in countries that
primarily export goods that do not rely on external finance. We demonstrate this effect empirically using
data on financial development and export patterns in a sample of 96 countries over the period 1970-99.
In summary, a number of important conclusions emerge from this research program. First, institutions are
a distinct source of comparative advantage, qualitatively different from traditional explanations for
international trade, such as technology, factor endowments, or increasing returns. Second, international
trade itself has an impact on institutions through a rich and multifaceted set of channels. In particular,
while there are good reasons to expect international trade to have a positive impact on the quality of
economic institutions, the ultimate effects are conditional on country circumstances, most importantly
comparative advantage.
II. International Trade and Macroeconomic Fluctuations
As world international trade experienced dramatic growth over the past few decades, the relationship
between trade openness and macroeconomic fluctuations has received a great deal of attention in the
theoretical and empirical literature. This is an important question. One of the main perceived downsides
of globalization is the increased insecurity that it brings about (Rodrik, 1997). In a series of papers, Julian
di Giovanni and I use disaggregated data to understand the relationship between trade openness,
macroeconomic volatility, and the transmission of shocks across countries.
“Trade Openness and Volatility,” (Review of Economics and Statistics, 2009) examines the
mechanisms through which trade openness affects output volatility using an industry-level panel dataset
of manufacturing production and trade. The main results are threefold. First, sectors more open to
international trade are more volatile. Second, trade is accompanied by increased specialization. These two
forces imply increased aggregate volatility. Third, sectors that are more open to trade are less correlated
with the rest of the economy, an effect that acts to reduce overall volatility. Combined together, the point
estimates indicate that the relationship between trade openness and overall volatility is positive and
economically significant.
Another channel through which trade can affect a country’s volatility is through the pattern of
specialization: countries that after trade opening come to specialize in particularly risky sectors may
experience increased macroeconomic volatility. “The Risk Content of Exports: a Portfolio View of
International Trade” (NBER International Seminar on Macroeconomics, 2012) develops a measure of
the riskiness of a country’s pattern of export specialization, and illustrates its features across countries and
over time. We propose an explanation for what determines the risk content of exports, based on the
theoretical literature exemplified by Turnovsky (1974). Countries with comparative advantage in safe
sectors or strong enough comparative advantage in risky sectors will specialize, whereas countries whose
comparative advantage in risky sectors is not too strong will diversify their export structure to insure
against export income risk. In “Comparative Advantage, Complexity, and Volatility” (Journal of
Economic Behavior and Organization, forthcoming), Pravin Krishna and I propose a novel source of
comparative advantage in more (or less) volatile sectors, with the complexity of the goods playing a
central role. Less developed countries with lower institutional ability to enforce contracts, or alternately,
with low levels of human capital will specialize in less complex goods which are also characterized by
higher levels of output volatility.
A related aspect of the relationship between trade openness and the macroeconomy has to do with
transmission of shocks across countries. The seminal paper by Frankel and Rose (1998) established what
has become a well-known empirical regularity: country pairs that trade more with each other experience
higher business cycle correlation. In “Putting the Parts Together: Trade, Vertical Linkages, and
Business Cycle Comovement” (American Economic Journal: Macroeconomics, 2010) Julian di
Giovanni and I examine the mechanisms underlying this empirical regularity using an industry-level
panel dataset of manufacturing production and trade. We show that vertical linkages in production are an
important explanation behind this effect: bilateral international trade increases comovement significantly
more in cross-border industry pairs that use each other as intermediate inputs. Our estimates imply that
these vertical production linkages account for some 30% of the total impact of bilateral trade on the
business cycle correlation.
Having explored the trade-volatility relationship empirically using sector-level data, in “Country Size,
International Trade, and Aggregate Fluctuations in Granular Economies” (Journal of Political
Economy, 2012) we then propose a new channel through which international trade affects macroeconomic
volatility. We study a multi-country model with heterogeneous firms that are subject to idiosyncratic
firm-specific shocks. When the distribution of firm sizes follows a power law with exponent sufficiently
close to −1, the idiosyncratic shocks to large firms have an impact on aggregate volatility. Opening to
trade increases the importance of large firms to the economy, thus raising macroeconomic volatility. Our
simulation exercise shows that the contribution of trade to aggregate fluctuations depends strongly on
country size: in the largest economy in the world by total GDP – the US – international trade increases
volatility by about 3.5%. By contrast, trade increases aggregate volatility by some 15-20% in small open
economies, such as Denmark or Romania. “Firms, Destinations, and Aggregate Fluctuations” (joint
also with Isabelle Méjean) further explores the idea that idiosyncratic shocks to firms contribute to
aggregate fluctuations. We use a database covering the universe of French manufacturing firms for the
period 1990–2007 to provide a forensic account of the role of individual firms in generating aggregate
fluctuations. Our estimates show that the idiosyncratic firm components do contribute substantially to
aggregate volatility, mattering about as much as the country-level and sectoral components.
In summary, this research program establishes that generally greater trade openness is indeed associated
with higher volatility, and more importantly isolates a number of distinct channels through which trade
makes its impact. What emerges is a nuanced picture, in which the effect of trade is conditional on
comparative advantage, geographical characteristics, and country size.
The greatest single event at the intersection of international trade and macroeconomic fluctuations is the
2008-09 global collapse in international trade. Logan Lewis, Linda Tesar, and I study this episode in a
series of papers. “The Collapse of International Trade During the 2008-2009 Crisis: In Search of the
Smoking Gun” (IMF Economic Review, 2010) shows that the recent reduction in trade relative to overall
economic activity is far larger than in previous downturns. Information on quantities and prices of both
domestic absorption and imports reveals a 40% shortfall in imports in the US, relative to what would be
predicted by a simple import demand relationship. We then evaluate a number of proposed explanations
for the severity of the trade collapse. Compositional effects turn out to be important: sectors with larger
reductions in domestic output had larger drops in trade. Sectors used as intermediate inputs also
experienced significantly higher percentage reductions in both imports and exports. By contrast, we find
no empirical support for the hypothesis that trade credit played a role in the trade collapse. In two followup projects, Logan, Linda, and I examine aspects of the trade collapse further. “The Role of Trade
Finance in the U.S. Trade Collapse: a Skeptic's View” (The World Bank, 2011) performs battery of
additional tests to confirm our earlier finding that financial factors did not have an appreciable impact on
the collapse in US trade. “The Collapse in Quality Hypothesis,” (American Economic Review Papers
and Proceedings, 2011) uses highly detailed US trade data to examine whether goods of higher quality
experienced greater falls in imports, and finds little, if any, robust econometric evidence in support of this
hypothesis.
Overall, a remarkably simple and parsimonious story emerges from our work. The trade collapse in the
US is largely due to the compositional effects, with demand for products that are traded internationally
(most notably durables) falling by more than demand for non-traded products. Global supply chains and
production linkages play a significant role as well. By contrast, it is much more challenging to detect a
noticeable impact of financial factors or other explanations such as demand for quality.
III. Capital Flows, Growth, and Volatility
International financial markets have been liberalized even more rapidly than trade in goods over the past
three decades. What are the effects of financial liberalization? In spite of a theoretical case that financial
liberalization should improve the allocation of capital and increase growth, the growth effects of financial
liberalization have not been easy to demonstrate in cross-country data. At the same time, worries persist
that financial liberalization may result in higher volatility.
In “Growth and Risk at the Industry Level: the Real Effects of Financial Liberalization,” (Journal
of Development Economics, 2009) Romain Rancière, Mathias Thoenig, and I analyze the effects of
financial liberalization on growth and volatility at the industry level in a large sample of countries.
Financial liberalization is found to have a positive, but temporary, effect on both growth and volatility of
production across industries. The positive growth effect comes from increased entry of firms, higher
capital accumulation, and an expansion in total employment, rather than from total factor productivity.
Having examined the impact of overall financial liberalization on growth and volatility, the question
remains whether the various types of capital flows differ in their effects. In “Do Some Forms of
Financial Flows Help Protect from Sudden Stops?” (World Bank Economic Review, 2007), Paolo
Mauro and I show that there are striking differences in the business cycle behavior of different capital
flows during “sudden stops” in financial flows. In such episodes, foreign direct investment is remarkably
stable, portfolio equity seems to play a limited role, while debt flows experience severe drops and often
remain depressed for a few years.
One of the chief benefits of financial liberalization proposed by theoretical literature is that it should
allow countries to better smooth consumption through international risk sharing. In the data, however,
financial liberalization is associated with higher consumption volatility, at least in developing countries.
In “Financial Liberalization and Consumption Volatility in Developing Countries,” (IMF Staff
Papers, 2005) I seek to rationalize the empirical evidence by linking it to two important features of
developing countries. First, domestic financial markets are underdeveloped. Second, access to
international markets is not available to all members of society. I show theoretically that in this setting
opening up to international markets can reduce the amount of risk sharing attained at home and raise the
volatility of consumption.
In summary, this research agenda develops a view of financial integration in which heterogeneity – of
industrial sectors, types of capital flows, or types of consumers – comes to the fore. Confirming the
conventional wisdom in the literature, the impact of financial integration is highly conditional and
nuanced, rather than clearly and unambiguously positive. The research described above takes a number of
steps forward to flesh out the details.
IV. Current and Future Work: Aspects of Globalization and Welfare
Recent advances in international trade (building on seminal work of Eaton and Kortum 2002 and Melitz
2003) have built tractable theoretical models that can be implemented numerically and used to evaluate
quantitatively the welfare impact of a variety of phenomena. Researchers can now develop models that
are global in scale – encompassing as many as 80 countries as well as multiple sectors – and at the same
time feature rich microfoundations of firm and technological heterogeneity. This combination means it is
now possible to dramatically expand the set of questions that can be answered, in particular regarding the
consequences of real-world heterogeneity present in the global economy, both at the firm and sector level.
My current research explores the implications of observed heterogeneity for the welfare impact of
globalization.
For instance, an influential recent literature combines fixed costs of production and exporting with firm
heterogeneity to study the entry decision into export markets – the so-called “extensive margin.” “Firm
Entry, Trade, and Welfare in Zipf's World,” (Journal of International Economics, 2013, joint with
Julian di Giovanni) evaluates the importance for welfare of fixed costs of production and trade and the
extensive margin of imports. The key ingredient of the analysis is the observation that in the data firm
size follows Zipf’s Law, a very fat-tailed distribution that implies a few large firms account for a
disproportionate share of overall economic activity. The main result is that once Zipf’s Law in firm size is
accounted for, fixed costs and the extensive margin have a vanishingly small impact on welfare. This is
because under Zipf’s Law, the large, infra-marginal firms have a far greater welfare impact than the much
smaller firms that comprise the extensive margin. In writing this paper, we noticed that existing estimates
of power laws in firm size typically ignore the impact of international trade. “Power Laws in Firm Size
and Openness to Trade: Measurement and Implications” (Journal of International Economics, 2011,
joint with Julian di Giovanni and Romain Rancière) uses a dataset of French firms to show that
international trade systematically affects the distribution of firm size: the dispersion in firm size is
systematically greater among exporting firms compared to non-exporting firms. We then propose two
simple ways of estimating underlying parameters of the firm size distribution that take explicit account of
exporting behavior.
Building on this modeling and estimation work, “A Global View of Cross-Border Migration” (joint
with Julian di Giovanni and Francesc Ortega) evaluates the global welfare impact of observed levels of
migration and remittances in both origin and destination countries, using a quantitative multi-sector
model of the global economy calibrated to aggregate and firm-level data on 60 developed and developing
countries. Our framework accounts jointly for origin and destination characteristics, as well as the
inherently multi-country nature of both migration and other forms of integration, such as international
trade and remittance flows. The quantitative results show that the welfare impact of observed levels of
migration is substantial, at about 5 to 10% of real income for natives of the main receiving countries and
about 10% for the main sending countries.
Developing the theme that heterogeneity matters and that it should be measured, my research program,
joint with Jing Zhang, next turns to the impact of sectoral technology, or Ricardian comparative
advantage. Understanding the evolution of technology is central in a variety of contexts, most notably in
economic growth and international trade. In the presence of multiple industries and comparative
advantage, the welfare consequences of technological improvements depend crucially on which sectors
experience productivity growth. To fully account for the impact of technological progress on economic
outcomes, we must understand not only the changes in average country-level productivity, but also how
relative technology evolves across sectors. “The Evolution of Comparative Advantage: Measurement
and Welfare Implications” estimates productivities at sector level in a sample of 75 countries and 5
decades, and examines how they evolve over time in both developed and developing countries. We find
that comparative advantage has become weaker: productivity grew systematically faster in sectors that
were initially at the greater comparative disadvantage. The global welfare implications of this
phenomenon are significant. Relative to the counterfactual scenario in which an individual country’s
comparative advantage remained the same as in the 1960s, and technology in all sectors grew at the same
country-specific average rate, welfare today is 1.9% lower at the median.
We next turn our attention to assessing the global welfare impact of two of the most important
developments in the international trading system over the last 20 years: the integration of China and the
integration of Eastern Europe after the fall of the Iron Curtain. In developed countries, a common concern
is that China’s growth will be biased towards sectors in which the developed world currently has a
comparative advantage. Samuelson (2004) argued that this pattern of Chinese productivity growth can
lead to absolute welfare losses in developed countries. “The Global Welfare Impact of China: Trade
Integration and Technological Change,” (American Economic Journal: Macroeconomics, forthcoming,
joint also with Julian di Giovanni) evaluates this conjecture using our 75-country quantitative model of
the world economy. The results are striking. The mean welfare gains to the rest of the world when
China’s comparative disadvantage sectors grow disproportionately faster are actually far larger than the
mean gains under balanced productivity growth. Thus, when evaluated quantitatively the welfare impact
of China’s growth on the rest of the world turns out to be the opposite of what had been conjectured by
Samuelson (2004). “Comparative Advantage and the Welfare Impact of European Integration”
(Economic Policy, 2012) then examines the trade integration of Eastern Europe following the fall of the
Iron Curtain. We use this episode as a “laboratory” to study the role of Ricardian comparative advantage
in determining the gains from trade. For Eastern Europe, comparative advantage is a key determinant of
the variation in the welfare gains: countries whose comparative advantage is most similar to Western
Europe tend to gain less, while countries with technology most different from Western Europe gain the
most. In “The Global Labor Market Impact of Emerging Giants: a Quantitative Assessment,” we
look instead at the distributional impact the trade integration of these countries. While the aggregate
impact of the trade opening of emerging giant countries (China, India, Central and Eastern Europe) tends
to be a fraction of 1% of real income, the distributional effects are an order of magnitude larger, with
changes in real wages ranging from -5% to 5% across sectors in most countries. The workers and capital
owners in emerging giants’ comparative advantage sectors such as Textiles and Wearing Apparel
experience greatest losses, while factor owners in Printing and Medical, Precision and Optical
Instruments normally gain the most.
To summarize, this research program, jointly with various coauthors, has implemented some of the
largest-scale heterogeneous-firm and Ricardian models in the literature, and used these quantitative
models to examine the welfare impact of trade integration, technological change, and migration. What
emerged is a more complete picture of the global effects of various economic developments and policy
changes. A running theme, and a repeated finding, of this agenda is that microeconomic structure is
crucial for understanding the macroeconomic impact of globalization. Time and again, attention to detail
leads to new insights and unexpected conclusions, such as demonstrating the vanishingly small impact of
the extensive margin of trade, or overturning Samuelson’s conjecture about the global impact of China’s
productivity growth.
References
di Giovanni, Julian and Andrei A. Levchenko, “Trade Openness and Volatility,” Review of Economics
and Statistics, 91:3 (Aug. 2009), 558-585.
di Giovanni, Julian and Andrei A. Levchenko, “Putting the Parts Together: Trade, Vertical Linkages, and
Business Cycle Comovement,” American Economic Journal: Macroeconomics, 2:2 (Apr. 2010), 95-124.
di Giovanni, Julian and Andrei A. Levchenko, “The Risk Content of Exports: a Portfolio View of
International Trade,” NBER International Seminar on Macroeconomics, 8:1 (May 2012), 97-151.
di Giovanni, Julian and Andrei A. Levchenko, “Country Size, International Trade, and Aggregate
Fluctuations in Granular Economies,” Journal of Political Economy, 120:6 (December 2012), 1083-1132.
di Giovanni, Julian and Andrei A. Levchenko, “Firm Entry, Trade, and Welfare in Zipf’s World,” Journal
of International Economics, 89:2 (March 2013), 283-296.
di Giovanni, Julian, Andrei A. Levchenko, and Isabelle Méjean, “Firms, Destinations, and Aggregate
Fluctuations,” CEPR Discussion Paper 9168, August 2012.
di Giovanni, Julian, Andrei A. Levchenko, and Francesc Ortega, “A Global View of Cross-Border
Migration,” CReAM Discussion Paper 1218, May 2012.
di Giovanni, Julian, Andrei A. Levchenko, and Romain Rancière, “Power Laws in Firm Size and
Openness to Trade: Measurement and Implications,” Journal of International Economics, 85:1 (Sept.
2011), 42-52.
di Giovanni, Julian, Andrei A. Levchenko, and Jing Zhang, “The Global Welfare Impact of China: Trade
Integration and Technological Change,” forthcoming, American Economic Journal: Macroeconomics.
Do, Quy-Toan and Andrei A. Levchenko, “Comparative Advantage, Demand for External Finance, and
Financial Development,” Journal of Financial Economics, 86:3 (Dec. 2007), 796-834.
Do, Quy-Toan and Andrei A. Levchenko, “Trade, Inequality, and the Political Economy of Institutions,”
Journal of Economic Theory, 144:4 (July 2009), 1489-1520.
Krishna, Pravin and Andrei A. Levchenko, “Comparative Advantage, Complexity, and Volatility,
forthcoming, Journal of Economic Behavior and Organization.
Levchenko, Andrei A., “Financial Liberalization and Consumption Volatility in Developing Countries”
IMF Staff Papers, 52:2 (Sept. 2005), 237-259.
Levchenko, Andrei A., “Institutional Quality and International Trade,” Review of Economic Studies, 74:3
(July 2007), 791-819.
Levchenko, Andrei A., “International Trade and Institutional Change,” forthcoming, Journal of Law,
Economics, and Organization.
Levchenko, Andrei A., Logan T. Lewis, and Linda L. Tesar, “The Collapse of International Trade During
the 2008-2009 Crisis: In Search of the Smoking Gun,” IMF Economic Review, 58:2 (Dec. 2010), 214-
253.
Levchenko, Andrei A., Logan T. Lewis, and Linda L. Tesar, “The ‘Collapse in Quality’ Hypothesis,”
American Economic Review: Papers and Proceedings, 101:3 (May 2011), 293-297.
Levchenko, Andrei A., Logan T. Lewis, and Linda L. Tesar, “The Role of Trade Finance in the U.S.
Trade Collapse: a Skeptic's View,” chapter 7 in Jean-Pierre Chauffour and Mariem Malouche, eds, “Trade
Finance During the Great Trade Collapse,” Washington, DC: The World Bank, 2011, 133-147.
Levchenko, Andrei A. and Paolo Mauro “Do Some Forms of Financial Flows Protect from Sudden
Stops?” World Bank Economic Review, 21:3 (Sept. 2007), 389-411.
Levchenko, Andrei A., Romain Rancière, and Matthias Thoenig “Growth and Risk at the Industry Level:
the Real Effects of Financial Liberalization,” Journal of Development Economics, 89:2 (July 2009), 210222.
Levchenko, Andrei A. and Jing Zhang, “The Evolution of Comparative Advantage: Measurement and
Welfare Implications,” NBER Working Paper 16806, July 2011.
Levchenko, Andrei A. and Jing Zhang, “Comparative Advantage and the Welfare Impact of European
Integration,” Economic Policy, 27:72 (October 2012), 567-602.
Levchenko, Andrei A. and Jing Zhang, “The Global Labor Market Impact of Emerging Giants: a
Quantitative Assessment,” manuscript, October 2012.
Other cited works:
Acemoglu, Daron, Simon Johnson and James Robinson “Colonial Origins of Comparative Development:
An Empirical Investigation,” American Economic Review, 2001, 91, 1369-1401.
Eaton, Jonathan and Samuel Kortum, “Technology, Geography, and Trade,” Econometrica, September
2002, 70 (5), 1741–1779.
Frankel, Jeffrey A. and Andrew K. Rose, “The Endogeneity of the Optimum Currency Area Criteria,”
Economic Journal, July 1998, 108 (449), 1009-25.
International Monetary Fund, “World Economic Outlook,” September 2005.
Johnson, Simon, Jonathan Ostry, and Arvind Subramanian, “The Prospects for Sustained Growth in
Africa: Benchmarking the Constraints,” IMF Working Paper 07/52, 2007.
La Porta, Rafael, Florencio Lopez-de-Silanes, Andrei Shleifer, and Robert Vishny “Law and Finance,”
Journal of Political Economy, 1998, 106, 1113-1155.
Melitz, Marc J., “The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry
Productivity,” Econometrica, November 2003, 71 (6), 1695–1725.
Rodrik, Dani, Has Globalization Gone Too Far?, Washington, D.C.: Institute for International Economics,
1997.
Rodrik, Dani, “Trade Policy Reform as Institutional Reform,” mimeo, Harvard Kennedy School, 2000.
Samuelson, Paul A., “Where Ricardo and Mill Rebut and Confirm Arguments of Mainstream Economists
Supporting Globalization,” Journal of Economic Perspectives, 2004, 18 (3), 135– 146.
Turnovsky, Stephen J., “Technological and Price Uncertainty in a Ricardian Model of International
Trade,” Review of Economic Studies, April 1974, 41 (2), 201-217.