After investment, exports and imports are the most volatile components of aggregate demand within countries. Moreover, the volatility of growth and the volatility of trade flows tend to move together; they declined from the 1990s until 2009, followed by an increase since 2009. This paper...

Traditional measures of trade diversification only take into account contemporaneous export baskets. These measures fail to capture a country’s ability to respond to shocks by allocating factors of production into activities for which it has already paid the fixed costs associated with...

Traditional measures of trade diversification only take into account contemporaneous export baskets. These measures fail to capture a country?s ability to respond to shocks by allocating factors of production into activities for which it has already paid the fixed costs associated with...