Question

You need to obtain the country-level data for Argentina and El Salvador on:

i. Imports of goods and services (in current US$)

ii. Exports of goods and services (in current US$)

iii. GDP (in current US$)

iv. GDP per capita (in current US$)

v. GINI Index (World Bank estimate) from the World Bank's World Development Indicators.

Q1. Using trade flows in your data, calculate openness as a percentage for Argentina and El Salvador and present them for each year for both countries as a table. You need to explain your method, namely, how you calculated openness using trade flows (write down the formula). In addition, you need to state what other alternative ways you could have adopted to calculate openness other than using trade flows.

Q2. Using the calculations you did for openness in Step 1, plot openness (as a percentage) against time (1998-2014) for both countries (Argentina and El Salvador) in a single graph (as a chart type: you are required to use line graph). Put openness (as a percentage) on the vertical axis and time on the horizontal axis. Explain and compare briefly how openness changes for these countries over time. Make sure you limit your explanation to 200 words.

Answer 1

q1. answer:

i caculated openness index as= {(import+export)/GDP}x100%

country		Indicator		1960	1961	1962	1963	1964	1965	1966	1967	1968	1969	1970	1971	1972	1973	1974	1975	1976	1977	1978	1979	1980	1981	1982	1983	1984	1985	1986	1987	1988	1989	1990	1991	1992	1993	1994	1995	1996	1997	1998	1999	2000	2001	2002	2003	2004	2005	2006	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016	2017	2018
Argentina		openness index	(import+export)/GDPx100	#DIV/0!	#DIV/0!	14.07553	15.78091	11.12743	10.37646	11.64261	12.49266	11.88816	12.79743	10.33744	12.61519	14.03564	13.32217	13.19158	11.80272	15.09688	16.94229	14.3238	12.84068	11.54567	14.29298	15.61149	14.98767	12.34638	18.00943	14.48603	15.44897	15.74346	19.6378	14.99086	13.75305	14.73098	16.22315	18.13435	19.77142	21.50647	23.33618	23.35003	21.38274	22.62244	21.85226	41.75272	40.64475	40.69265	40.55127	40.43348	40.94517	40.40267	34.05713	34.97101	35.20615	30.52654	29.33393	28.40679	22.48623	26.09389	25.22333	30.70045
EL Salvador		openness index	(import+export)/GDPx100	#DIV/0!	#DIV/0!	#DIV/0!	#DIV/0!	#DIV/0!	55.19756	54.441	54.29625	52.45206	48.98037	49.38389	51.24608	57.22154	62.94304	73.24897	71.26297	72.36071	75.63808	69.79629	74.11279	67.40646	60.26649	51.24774	54.3978	50.29068	52.21054	53.71412	45.09462	38.0957	36.9283	49.61563	47.75343	48.67525	53.52729	55.14865	59.36075	55.28186	63.55709	60.87229	60.99049	68.71009	65.89074	65.91909	68.23698	69.78226	69.71581	73.45558	77.62105	80.66597	66.07119	73.53697	79.27583	77.64916	80.45105	78.10605	76.56105	72.93198	74.458	77.52596

#DIV/0!=cannot be calculated due to lack of data

in other method, i could just take the data of Export% and Imort % of GDPs. By adding them I could get the same result.

q2.ans

the red line shows openness index of the argentian and green line shows the openness index of el Salvador. on the y-axis numbers indicate openness percentages.

Argentina increased their openness from 2001 to 2002 by almost 20% then stayed there for almost 6 years then after 2008, their trade volume delined and even in 2014 they are showing a declined trade volume with respect to their GDP.

El Salvador, on the other hand, showed an increasing trend in their openness and they are slowly increasing their trade percentage from 60% in 1998 to almost 80% in 2014. In 2008 however, their trade volume declined a bit but from 2009 onwards they were back on track increasing their overall trade volumes.

2008 is a significant year here because the world economy crashed that year and hence trade also showed a declining trend. overall we can say that el Salvador is a more open country trade wise than Argentina.