Contents -- I. Introduction -- II. Empirical Strategy and Data -- A. Empirical Strategy -- B. Additional Methodological Issues -- C. Data and Summary Statistics -- III. Results -- A. Trade and Volatility within a Sector -- B. Trade and Sector Comovement -- C. Trade and Specialization -- IV. The Impact on Aggregate Volatility -- A. The Relationship between Each Channel and the Aggregate Volatility -- B. The Impact Across Countries and Over Time -- C. Country Characteristics and the Impact on Aggregate Volatility -- D. Changes in the Impact on Aggregate Volatility Across Decades -- V. Conclusion -- References -- Text Tables -- 1. Volatility of Annual Output Growth per Worker: Cross-Sectional Results -- 2. Volatility of Annual Output Growth per Worker: Panel Results -- 3. Volatility of Annual Growth of Quantity per Worker and of Prices: Cross-Sectional Results -- 4. Volatility of Annual Growth of Quantity per Worker and of Prices: Cross-Sectional Results -- 5. Correlation of Annual Output Growth per Worker with the Rest of the Manufacturing Section: Cross-Section Results -- 6. Correlation of Annual Output Growth per Worker with the Rest of the Manufacturing Section: Panel Results -- 7. Correlation of Annual Growth of Quantity per Worker and of Prices with Rest of the Manufacturing Section: Cross-Sectional Results -- 8. Specialization and Trade Openness at the Country Level -- 9. Volatility, Correlation and Specialization Coefficients Across Decades -- 10. Cross-Country and Cross-Decade Impacts of Changes in Openness -- 11. The Impact of Changes in Openness Evaluated at Different Percentiles of the Data -- Text Figures -- 1. Volatility and Openness in the 1990's -- 2. Comparison of Manufacturing and Aggregate Volatility -- 3. Manufacturing Output Volatility and Openness -- 4. Trade and Specialization -- Appendices.

I. Sector-Level Gravity-Based Instrument -- II. The Symmetry Assumption -- Appendix Tables -- A1. Country Summary Statistics: 1970-99 -- A2. Sector Summary Statistics: 1970-99 -- A3. Volatility of Annual Output Growth per Worker: Cross-Sectional Robustness Results -- A4. Volatility of Annual Output Growth per Worker: Panel Robustness Results -- A5. Correlation of Annual Output Growth per Worker with Rest of the Manufacturing Sector: Cross-Sectional Robustness -- A6. Correlation of Annual Output Growth per Worker with Rest of the Manufacturing Sector: Panel Robustness Results -- A7. Specialization and Trade Openness at the Country Level: Robustness Results -- Appendix Figure -- A1. Sector-Level Gravity Coefficients.