Analysis and Evaluation of Regional Development for Stability and Convergence among Selected Countries (Panel Data Approach)

The axes associated with globalization and the factors contributing to the increase in international trade volume have raised many questions in macroeconomics. One of the most important issues discussed here is to examine the relationship between trade openness and macroeconomic variables such as inflation fluctuations. Trade liberalization is one of the most important tools of the process of globalization of the economy. The main purpose of this study is to investigate the effect of the degree of trade openness on stability and inflation (inflation fluctuations) in the countries selected during the period 2017-2000. For this purpose, panel data technique is used to estimate the research model. The results of the model estimation indicate that the variable of trade openness had a negative impact on inflation fluctuations. Therefore, the most important policy recommendation of this study is that macroeconomic policy makers in these countries reduce trade barriers and restrictions on imports and increase their share of world markets as exports increase. As the degree of trade openness increases, countries in the region will have an impact on world prices and markets and will remain immune from price changes. This will ultimately lead to the stabilization of the economic situation and other macroeconomic indicators, including inflation.