Article
Trade Openness, Capital Mobility, and the Sacrifice Ratio
Open Economies Review
Document Type
Article
Language
eng
Format of Original
15 p.
Publication Date
9-1-2009
Publisher
Springer
Disciplines
Abstract
This paper develops and evaluates empirically the implications of a theoretical model of an open economy in which variations in both trade openness and capital mobility can influence the sacrifice ratio. Key predictions forthcoming from the model are that both forms of globalization can independently affect the sacrifice ratio, once the influences of the level of central bank independence and the degree of wage stickiness in nations’ economies are taken into account. Examination of cross-country data encompassing 58 disinflations for 16 countries yields evidence consistent with these essential predictions of the theoretical framework.
Citation Information
Joseph P. Daniels and David D VanHoose. "Trade Openness, Capital Mobility, and the Sacrifice Ratio" Open Economies Review (2009) ISSN: 0923-7992 Available at: http://works.bepress.com/joseph_daniels/31/
Accepted version. Open Economics Review, Vol. 20, No. 4 (September 2009): 473-487. DOI. © 2009 Springer. Used with permission.
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