The paper investigates the impact of uncertainty generated by export earnings instability on economic growth. A model that links uncertainty to economic performance is developed, and from the model, the condition under which outward - oriented economic policy contributes positively to economic growth was set. From panel data analysis, it is inferred that to benefit from an outward-oriented economic policy, the stable component of export revenue of the region has to grow annually by at least 7.5% if this condition is not satisfied, the policy acts adversely on economic performance by inducing resource misallocation.


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