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This study investigates the implications of trade, institutional and geographical variables on economic growth. The proposed analytical framework extends the seminal works of Frankel and Romer (1999), Rodrik et al. (2004), Silva and Tenreyro (2006) and Squalli and Wilson (2011).

Applying a comprehensive panel database that includes 133 countries during the period 1996–2014. Our estimators encompass three dimensions (fixed effects) and use the Pseudo Poisson Maximum Likelihood (PPML) approach to create an instrument for trade. This approach effectively addresses the issues associated with endogenous regressors.

Findings from this study demonstrate a significant correlation between economic growth and the variables of trade, institutions and geography, with trade surfacing as the most influential factor. Notably, the impact of these factors appears to be diminished in low-income countries, especially in the parameters that reflect the role of institutions on per capita income.

The originality of the study is underscored by four key aspects: the employment of a unique econometric approach, the use of a three-dimensional panel database with fixed effect estimators and PPML, the inclusion of a novel measure of trade openness diverging from the conventional literature in the bilateral trade equation, and finally, the implementation of robustness tests probing the sensitivity of per capita income to institutions, trade and geography.

This paper sets out to argue that, due to a stable set of economic policies over the past decade, today Brazil is much more resilient to international financial crises than in the 1990s.

The paper presents preliminary macroeconomic data in a country case study.

The paper concludes that the initial impact of the current international financial crisis on Brazil has been much less severe than similar crisis episodes in the past.

Given that the crisis is still unfolding, the paper presents only preliminary data regarding its impact on emerging markets.

The paper suggests that emerging markets should adopt flexible exchange rate regimes and stable macroeconomic policies as a means to reduce their exposure to international shocks.

The paper makes an initial diagnosis regarding the impact of the international financial crisis on emerging markets that have adopted sensible economic policies, and is of interest to scholars, business people, and policymakers in developed and emerging countries.