Open Economies Review

, Volume 20, Issue 4, pp 473–487

Trade Openness, Capital Mobility, and the Sacrifice Ratio

Research Article

DOI: 10.1007/s11079-008-9093-5

Cite this article as:
Daniels, J.P. & VanHoose, D.D. Open Econ Rev (2009) 20: 473. doi:10.1007/s11079-008-9093-5


This paper develops and evaluates empirically the implications of a theoretical model of an open economy in which variations in both trade openness and capital mobility can influence the sacrifice ratio. Key predictions forthcoming from the model are that both forms of globalization can independently affect the sacrifice ratio, once the influences of the level of central bank independence and the degree of wage stickiness in nations’ economies are taken into account. Examination of cross-country data encompassing 58 disinflations for 16 countries yields evidence consistent with these essential predictions of the theoretical framework.


Trade openness Capital mobility Sacrifice ratio 

JEL Classification

F40 F41 F43 

Copyright information

© Springer Science+Business Media, LLC 2008

Authors and Affiliations

  1. 1.Department of EconomicsMarquette UniversityMilwaukeeUSA
  2. 2.Hankamer School of BusinessBaylor UniversityWacoUSA

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