Small states, no different from large states in income and growth, should receive the same policy advice large states do. Because of their greater openness, they may be more vulnerable to volatility in terms-of-trade shocks--but their openness pays off in growth

This paper provides up-to-date characterization of the association between trade and GDP comovement - also called the trade comovement slope- for 150 countries from 1962 to 2011. The paper shows that trade is significantly linked to more GDP correlation, either directly through bilateral trade,...