A Convex Hull Approach to Counterfactual Analysis of Trade Openness and Growth

22 Pages Posted: 6 Jul 2009

See all articles by Michael Funke

Michael Funke

University of Hamburg - Department of Economics; Tallinn University of Technology (TUT)

Marc Gronwald

University of Aberdeen; CESifo (Center for Economic Studies and Ifo Institute)

Date Written: June 2009

Abstract

In this paper, we apply a convex hull approach to counterfactual analysis of trade openness and growth. The experiments we choose evaluate the importance of trade openness for growth across African countries. Specifically, we ask the question “what would happen if African countries were more open?”. The evidence indicates that several countries don´t fall within the convex hull of the observed data and therefore counterfactual inferences are risky. This conclusion is at odds with the literature arguing that greater trade openness would unequivocally lead to higher growth in Africa.

Keywords: openness, economic growth, robustness, counterfactuals, convex hull

JEL Classification: O11, O40, C52

Suggested Citation

Funke, Michael and Gronwald, Marc, A Convex Hull Approach to Counterfactual Analysis of Trade Openness and Growth (June 2009). CESifo Working Paper Series No. 2692, Available at SSRN: https://ssrn.com/abstract=1430290 or http://dx.doi.org/10.2139/ssrn.1430290

Michael Funke (Contact Author)

University of Hamburg - Department of Economics ( email )

Von-Melle-Park 5
room 2128 C rise
Hamburg, 20146
Germany

Tallinn University of Technology (TUT) ( email )

Ehitajate tee 5
Tallinn, 12618
Estonia

Marc Gronwald

University of Aberdeen ( email )

Dunbar Street
Aberdeen, Scotland AB24 3QY
United Kingdom

CESifo (Center for Economic Studies and Ifo Institute) ( email )

Poschinger Str. 5
Munich, DE-81679
Germany

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
94
Abstract Views
860
Rank
499,092
PlumX Metrics