The decades preceding the recent financial crisis and global downturn were a period ofunusually mild output volatility …;Great Moderationrdquo;.These findings are consistent with, but not a direct test of, the theory that relates the waning ofoutput volatility …

volatility, especially in the past decade. Nevertheless, dollarised countries benefit from higher levels of investment and trade …

-the People's Republic of China and cross-country empirical evidence to support the theory. As an application, our cross …

volatility. In the framework of a threshold model, it is shown empirically that this relation depends on country’s financial risk … risk, financial openness decreases output volatility, while, in countries with high financial risk, financial openness … increases output volatility. Extensive robustness checks confirm this result. -- Output volatility ; financial openness …