Trade reform, macroeconomic performance and export growth in ten Latin American countries, 1979–95

Abstract

The impact of trade reforms on economic performance in ten Latin American countries is examined using a panel data set of 17 annual observations. Each country is classified as ‘reformed’ or ‘unreformed’ in a given year, and the model tests whether reform improves performance across various dimensions. Both manufactured and total exports display greater real exchange rate and income elasticity after reform, but the effects have been offset by real exchange rate appreciation. Key ‘real’ variables such as GDP growth and investment ratios appear not to have improved.