The Impact of Trade Openness on Economic Stability in Asian Countries

Abstract

The purpose of this study was to investigate the nexus between trade openness and three aspects of macroeconomic stability, including growth stability, inflation stability, and exchange rate stability, in 20 Asian countries from 2011 to 2019. The empirical analysis was carried out with the help of the autoregressive distributed lag (ADRL) model to examine the impact of trade openness on economic stability. Our results revealed that trade openness was negatively associated with the growth stability of the countries located in the Asian region, while the opposite was true for exchange rate stability in the short run. There was, however, no relation between trade openness and inflation stability, which requires further investigation. In addition to contributing new empirical evidence to academic literature, our study expects to have important implications for policymakers. In particular, Asian countries are recommended to speed up the process of trade liberalisation to accelerate long-run economic growth and exchange rate stability.

Pembiayaan Syariah dan Stabilitas Makroekonomi: Implikasi terhadap Perkembangan UMKM di Indonesia

“…Studi ini menunjukkan bahwa terdapat bukti yang menunjukkan adanya pass-through yang sangat rendah dan tidak lengkap dari tingkat kebijakan ke tingkat deposito. Studi lain yang dapat menjadi referensi adalah penelitian oleh Nguyen (Nguyen et al, 2023) yang mengkaji dampak keterbukaan perdagangan terhadap stabilitas ekonomi di negaranegara Asia menggunakan model ADRL. Penelitian ini memberikan wawasan tentang bagaimana model ADRL dapat digunakan untuk menganalisis dampak keterbukaan perdagangan terhadap stabilitas ekonomi.…”

Untitled

“…Due to the persistency of inflation as an economic challenge in many countries with Nigeria inclusive, it has continued to be matter of concern for policymakers as it can introduce uncertainty that adversely affects economic growth. Furthermore, high inflation rates can have a detrimental effect on various aspects of the economy, from production and resource distribution to international relations (Guender & McHugh-Smith, 2023;Nguyen et al, 2023). It can erode the purchasing power of money, create uncertainty in financial markets, and impede long-term economic planning.…”

An examining factors influencing internasional export and import relationships in context of Vietnam’s free trade agreements

“…(V. M. H. Nguyen et al, 2023) investigate how FTAs and foreign direct investment (FDI) influence Vietnamese trade flows, focusing on agreements with the United States and Japan, which have notably expanded exports and imports. (Tran & Vo, 2022)examines the determinants of Vietnamese exports to the European Union (EU) market using a gravity model, analyzing factors such as GDP, population, infrastructure, trade openness, and distance.…”