VULNERABILITY OF SMALL OPEN ECONOMIES TO EXTERNAL ECONOMIC SHOCKS

Authors

Keywords
international propagation of economic shocks, synchronization of national economies, economic growth, economic interdependence

Summary
This paper aims to study the international propagation of economic shocks by adopting the thesis for a causality between the economic growth in a country and the dynamics of the respective indicator in the foreign trade partners of that country. The main tasks of this research are: to develop an econometric model for testing the causal relationship between the economic growth of national economies; to study the influence of a national economy’s openness on its vulnerability to external economic shocks; to study the influence of the national economy’s size on the vulnerability to external economic shocks. A multiplicative regression model is used to establish the specified causality on which the relative size of partners’ economies has a moderating influence. There is a statistically significant relationship between the openness of the national economy and its susceptibility to external economic shocks

JEL: E32, F41, F42, F43, F44
Pages: 19
Price: 3 Points

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