A popular measure of a country's openness to international trade is an index computed as the sum

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A popular measure of a country's "openness" to international trade is an index computed as the sum of the country's exports and imports divided by its GDP. Calculate and graph the openness index for the United States using quarterly data since 1947. What has been the postwar trend? Can you think of any factors that might help explain this trend? Be careful with the data, as some databases record imports with a negative sign and then add them to exports to get net exports. If that is the case with your data, take the absolute value of imports before adding it to exports, because we are interested in the total volume of trade, not the balance of trade. What usually happens to the openness index in recessions?

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Macroeconomics

ISBN: 9780137876037

11th Edition

Authors: Andrew B Abel

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