Working Paper: NBER ID: w13037
Authors: Anna Maria Mayda; Kevin H. O'Rourke; Richard Sinnott
Abstract: This paper uses international survey data to document two stylized facts. First, risk aversion is associated with anti-trade attitudes. Second, this effect is smaller in countries with greater levels of government expenditure. The paper thus provides evidence for the microeconomic underpinnings of the argument associated with Ruggie (1982), Rodrik (1998) and others that government spending can bolster support for globalization by reducing the risk associated with it in the minds of voters.
Keywords: Risk Aversion; Globalization; Government Expenditure; Trade Attitudes
JEL Codes: F13; P16
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| risk aversion (D81) | anti-trade attitudes (F13) |
| government expenditure (H59) | moderation of risk aversion's impact on trade preferences (D11) |
| risk aversion (D81) | anti-globalization sentiment (F69) |
| government size (H11) | mitigation of negative impact of risk aversion on trade attitudes (F69) |