IESET.
Hypotheses·trade·latam_extra_capital_account_openness_panel_1990_2024

Across Latin American economies 1990-2024, the cross-country gradient of capital-account openness (Chinn-Ito-style index proxied by Foreign-direct-investment-share-of-GDP plus external-debt-stock-share-of-GNI as available signals) correlates positively with cumulative real-GDP-per-capita growth and negatively with macro volatility, but conditionally on institutional quality (WGI).

The pre-registered claim is (a) panel-FE estimation of log_gdp_pc on FDI-openness shows a positive coefficient at p < 0.10, AND (b) the interaction with WGI Government Effectiveness is positive (i.e. capital-account openness pays off more in higher- capacity states), AND (c) macro-volatility (rolling SD of real-GDP growth) is not increased by openness conditionally on institutions.

PARTIALengine/runs/latam_extra_capital_account_openness_panel_1990_2024

PARTIAL — coef=-0.0004305, p=0.175 (above α=0.1); direction inconclusive

confidence cueThe result is useful, but not decisive. Treat it as a clue, not a settled conclusion.

policy briefMixed or noisy

In ordinary language

When countries open more of the economy to trade and competition, do people end up with better long-run income or productivity outcomes?

plain answer

The evidence is suggestive but not decisive. coef=-0.0004305, p=0.175 (above α=0.1); direction inconclusive

why it matters

This matters because trade claims should change belief only when they survive a pre-declared empirical test.

how the test works

It compares 20 country or place units from 1990 to 2024, using a panel fe design.

what was measured
What changed
  • Foreign investment inflow share income
  • External debt stock share gni
What we checked
  • Log income pc constant
  • Real income growth volatility
what this does not prove

A single test is not the whole truth. It narrows the claim under a specific sample, time period, and method. Strong policy conclusions need the pattern to survive nearby tests, alternative data, and serious objections.

verification

No evidence packet has been generated yet.

Results

engine/runs/latam_extra_capital_account_openness_panel_1990_2024
1007550250199020072024ARGBOLBRACHLCOLCRIDOM
illustrative sketch · run pending
No coefficients yet. When the model fires, this chart will show log_gdp_pc_constant across 20 sampled countries over 1990–2024.
The shapes above are stylised — none of the lines are real data.
Placeholder for latam_extra_capital_account_openness_panel_1990_2024. Published chart will be generated from engine/runs/latam_extra_capital_account_openness_panel_1990_2024/chart_data.json.

Pre-registration

pre-registered
first-spec commit 098ce96 · 2026-04-30T12:57:33Z
run generated · 2026-06-29T17:52:53Z

Across Latin American economies 1990-2024, the cross-country gradient of capital-account openness (Chinn-Ito-style index proxied by Foreign-direct-investment-share-of-GDP plus external-debt-stock-share-of-GNI as available signals) correlates positively with cumulative real-GDP-per-capita growth and negatively with macro volatility, but conditionally on institutional quality (WGI). The pre-registered claim is (a) panel-FE estimation of log_gdp_pc on FDI-openness shows a positive coefficient at p < 0.10, AND (b) the interaction with WGI Government Effectiveness is positive (i.e. capital-account openness pays off more in higher- capacity states), AND (c) macro-volatility (rolling SD of real-GDP growth) is not increased by openness conditionally on institutions.

Falsification criterion — what would disprove this

set before the run · honoured after

This hypothesis is considered falsified if:

Not supported if (a) FDI-openness coefficient on log_gdp_pc is not positive at p < 0.10, OR (b) the openness × WGI interaction is not positive, OR (c) openness × WGI interaction on macro volatility is not negative (i.e. openness conditional on good institutions does not stabilise growth).

formal test & threshold
test:      panel_fe_with_wgi_interaction
threshold: fdi_openness coefficient > 0 at p < 0.10 AND (fdi_openness × wgi_government_effectiveness) coefficient > 0 AND (fdi_openness × wgi_government_effectiveness) on growth_volatility coefficient < 0

Method

Template
panel_fe
Clustering
country
Sample
20 countries · 1990 – 2024
Evidence type
associational

Primary: panel_fe of log_gdp_pc on country and year FE plus capital-flow openness controls plus interaction with WGI. Secondary: panel_fe of macro-volatility on the same set.

Data

VariableSourceTransform
log_gdp_pc_constant
outcome
world_bank_wdi:NY.GDP.PCAP.KDtier 2
log
real_gdp_growth_volatility
outcome
world_bank_wdi:NY.GDP.MKTP.KD.ZGtier 2
rolling_5yr_sd
fdi_inflow_share_gdp
treatment
world_bank_wdi:BX.KLT.DINV.WD.GD.ZStier 2
level
external_debt_stock_share_gni
treatment
world_bank_wdi:DT.DOD.DECT.GN.ZStier 2
level
portfolio_equity_inflow_share_gdp
treatment
world_bank_wdi:BX.PEF.TOTL.CD.WDtier 2
log_level
wgi_government_effectiveness
control
wgi:GOV_WGI_GE.ESTtier 4
level
terms_of_trade
control
world_bank_wdi:TT.PRI.MRCH.XD.WDtier 2
level
us_policy_rate
control
fred:FEDFUNDStier 1
level
oil_price
control
fred:DCOILBRENTEUtier 1
log_level

● ready  · ● pending  · ● reconstruct-needed

Detailed result card

Result card — latam_extra_capital_account_openness_panel_1990_2024

Verdict: PARTIAL — coef=-0.0004305, p=0.175 (above α=0.1); direction inconclusive

Pre-registration

  • Claim: Across Latin American economies 1990-2024, the cross-country gradient of capital-account openness (Chinn-Ito-style index proxied by Foreign-direct-investment-share-of-GDP plus external-debt-stock-share-of-GNI as available signals) correlates positively with cumulative real-GDP-per-capita growth and negatively with macro volatility, but conditionally on institutional quality (WGI). The pre-registered claim is (a) panel-FE estimation of log_gdp_pc on FDI-openness shows a positive coefficient at p < 0.10, AND (b) the interaction with WGI Government Effectiveness is positive (i.e. capital-account openness pays off more in higher- capacity states), AND (c) macro-volatility (rolling SD of real-GDP growth) is not increased by openness conditionally on institutions.
  • Falsification rule: Not supported if (a) FDI-openness coefficient on log_gdp_pc is not positive at p < 0.10, OR (b) the openness × WGI interaction is not positive, OR (c) openness × WGI interaction on macro volatility is not negative (i.e. openness conditional on good institutions does not stabilise growth).
  • Falsification test: panel_fe_with_wgi_interaction

Estimate

  • Method: linearmodels.PanelOLS
  • Coefficient (treatment): -0.0004305
  • Std error: 0.0003149
  • p-value: 0.175
  • Observations: 128, countries: 10
  • Within R²: 0.453
  • Fixed effects: entity=True, time=True
  • Clustering: country

Variables resolved

  • world_bank_wdi:NY.GDP.PCAP.KD → log_gdp_pc_constant (outcome, publisher=world_bank_wdi, n=12104)
  • world_bank_wdi:NY.GDP.MKTP.KD.ZG → real_gdp_growth_volatility (outcome, publisher=world_bank_wdi, n=13897)
  • world_bank_wdi:BX.KLT.DINV.WD.GD.ZS → fdi_inflow_share_gdp (treatment, publisher=world_bank_wdi, n=9936)
  • world_bank_wdi:DT.DOD.DECT.GN.ZS → external_debt_stock_share_gni (treatment, publisher=world_bank_wdi, n=5996)
  • world_bank_wdi:BX.PEF.TOTL.CD.WD → portfolio_equity_inflow_share_gdp (treatment, publisher=world_bank_wdi, n=8623)
  • world_bank_wgi:GOV_WGI_GE.EST → wgi_government_effectiveness (controls, publisher=wgi, n=5168)
  • world_bank_wdi:TT.PRI.MRCH.XD.WD → terms_of_trade (controls, publisher=world_bank_wdi, n=6478)
  • fred:FEDFUNDS → us_policy_rate (controls, publisher=fred, n=1460)
  • fred:DCOILBRENTEU → oil_price (controls, publisher=fred, n=800)

Generated by scripts/run_panel_fe.py at 2026-06-29T17:52:53+00:00

Strongest opposing argument

Every hypothesis ships with its charitable opposing argument. The framework earns credibility by handling objections at their strongest, not weakest.

Notes

Cross-country LATAM panel; openness measure approximates Chinn-Ito via WDI series.

Authored framework. Read the transparency note.