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

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1. 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? (Hint: 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.)

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Macroeconomics Value Edition

ISBN: 978-0136114895

7th Edition

Authors: Andrew B. Abel ,Ben Bernanke ,Dean Croushore

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