Openness and Growth: An Empirical Investigation on a Panel of Countries over the Period 1999-2009

The paper investigates the link between indicators of economic openness and real growth of output. It is based on the theoretical expectation that openness should affect total factor productivity mainly through technological spillovers and market discipline. This is indeed observable in the data for 213 countries spanning 10 years for flows of goods and services, whereas the effects of financial liberalization are more ambiguous. A clear policy recommendation stems from these results: countries should target their efforts at current account liberalization, but proceed with extra care when liberalizing the financial account of the Trade Balance.