The IMF Working Papers series is designed to make IMF staff research available to a wide audience. Almost 300 Working Papers are released each year, covering a wide range of theoretical and analytical topics, including balance of payments, monetary and fiscal issues, global liquidity, and national and international economic developments.
A study by the author published in 1988 proposed the hypothesis that export instability depends upon the level of industrialization of the exporting country and the position of exports in the product cycle (growth or mature products). This paper provides further empirical evidence in support of the hypothesis. The paper discusses the significance of the empirical findings, explains why diversification has increased export instability in many developing countries, and discusses the policy implications of the findings. The paper also analyzes the effects of data aggregation on empirical results and suggests topics for future research.