The Link Between Economic Growth And Growth Volatility
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The Link Between Economic Growth And Growth Volatility
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Author : Dong-Hyeon Kim
language : en
Publisher:
Release Date : 2014
The Link Between Economic Growth And Growth Volatility written by Dong-Hyeon Kim and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2014 with categories.
This paper investigates the relationship between economic growth and growth volatility through simultaneous equations system. By employing the identification through heteroskedasticity method of Rigobon (2003, Review of Economics and Statistics 85: 777-792) and using a panel of 158 countries over the period 1960-2010, we find that output volatility is detrimental to economic growth, suggesting that stabilization policies to mitigate short-run economic fluctuations contribute to long-run economic growth. And economic growth accelerates output variability, supporting the feedback effects from growth to the volatility. The evidence is robust to a number of sensitivity tests.
Volatility And Growth
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Author : Viktoria Hnatkovska
language : en
Publisher: World Bank Publications
Release Date : 2004
Volatility And Growth written by Viktoria Hnatkovska and has been published by World Bank Publications this book supported file pdf, txt, epub, kindle and other format this book has been release on 2004 with Business cycles categories.
Volatility And Growth
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Author : Viktoria Hnatkovska
language : en
Publisher:
Release Date : 2013
Volatility And Growth written by Viktoria Hnatkovska and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2013 with categories.
The authors study the empirical, cross-country relationship between macroeconomic volatility and long-run economic growth. They address four central questions: 1) Does the volatility-growth link depend on country and policy characteristics, such as the level of development or trade openness? 2) Does this link reflect a statistically and economically significant causal effect from volatility to growth? 3) Has this relationship been stable over time and has it become stronger in recent decades? 4) Does the volatility-growth connection actually reveal the impact of crises rather than the overall effect of cyclical fluctuations? The authors find that macroeconomic volatility, and long-run economic growth are indeed negatively related. This negative link is exacerbated in countries that are poor, institutionally underdeveloped, undergoing intermediate stages of financial development, or unable to conduct counter-cyclical fiscal policies. They find evidence that this negative relationship actually reflects the harmful effect from volatility to growth. Furthermore, the authors find that the negative effect of volatility on growth has become considerably larger in the past two decades, and that it is mostly due to large recessions rather than normal cyclical fluctuations.
Volatility And Growth
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Author : Philippe Aghion
language : en
Publisher: OUP Oxford
Release Date : 2005-07-28
Volatility And Growth written by Philippe Aghion and has been published by OUP Oxford this book supported file pdf, txt, epub, kindle and other format this book has been release on 2005-07-28 with Business & Economics categories.
It has long been recognized that productivity growth and the business cycle are closely interrelated. Yet, until recently, the two phenomena have been investigated separately in the economics literature. This book provides the first consistent attempt to analyze the effects of macroeconomic volatility on productivity growth, and also the reverse causality from growth to business cycles. The authors show that by looking at the economy through the lens of private entrepreneurs, who invest under credit constraints, one can go some way towards explaining persistent macroeconomic volatility and the effects of volatility on growth. Beginning with an analysis of the effects of volatility on growth, the authors argue that the lower the level of financial development in a country the more detrimental the effect of volatility on growth. This prediction is confirmed by cross-country panel regressions. The data also suggests that a fixed exchange rate regime or more countercyclical budgetary policies are growth-enhancing in countries with a lower level of financial development. The former reduce aggregate volatility whereas the latter reduce the negative effects of volatility on long-term productivity-enhancing investment by firms. The book concludes with an investigation into how the interplay between credit constraints and pecuniary externalities is sufficient to generate persistent business cycles and to explain the occurrence of currency crises.
On The Link Between The Volatility And Skewness Of Growth
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Author : Geert Bekaert
language : en
Publisher:
Release Date : 2012
On The Link Between The Volatility And Skewness Of Growth written by Geert Bekaert and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2012 with Economics categories.
In a sample of 110 countries over the period 1960-2009, we document a positive relation between the volatility and skewness of growth in the cross-section. The relation holds regardless of initial level of economic development and of subsequent long-run growth rate. We argue that this novel stylized fact is related to two distinct phenomena: sudden growth spurts in mostly emerging markets, and rare and abrupt crises in mostly developed economies. The former phenomenon is driven by industrialization, macroeconomic stabilization, and the exploitation of natural resources. The latter is consistent with recent theories of financial frictions. The positive relation between volatility and skewness in the cross-section is in sharp contrast with a negative relation between the two in panel data with country fixed effects which is fully driven by business cycle variation in rich countries.
How Do Trade And Financial Integration Affect The Relationship Between Growth And Volatility
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Author : M. Ayhan Kose
language : en
Publisher: International Monetary Fund
Release Date : 2005
How Do Trade And Financial Integration Affect The Relationship Between Growth And Volatility written by M. Ayhan Kose and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2005 with Business & Economics categories.
The influential work of Ramey and Ramey (1995) highlighted an empirical relationship that has now come to be regarded as conventional wisdom-that output volatility and growth are negatively correlated. We reexamine this relationship in the context of globalization-a term typically used to describe the phenomenon of growing international trade and financial integration that has intensified since the mid-1980s. Using a comprehensive new data set, we document that, while the basic negative association between growth and volatility has been preserved during the 1990s, both trade and financial integration significantly weaken this negative relationship. Specifically, we find that, in a regression of growth on volatility and other controls, the estimated coefficient on the interaction between volatility and trade integration is significantly positive. We find a similar, although less significant, result for the interaction of financial integration with volatility.
Revisiting The Link Between Finance And Macroeconomic Volatility
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Author : Ms.Era Dabla-Norris
language : en
Publisher: International Monetary Fund
Release Date : 2013-01-30
Revisiting The Link Between Finance And Macroeconomic Volatility written by Ms.Era Dabla-Norris and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2013-01-30 with Business & Economics categories.
This paper examines the impact of financial depth on macroeconomic volatility using a dynamic panel analysis for 110 advanced and developing countries. We find that financial depth plays a significant role in dampening the volatility of output, consumption, and investment growth, but only up to a certain point. At very high levels, such as those observed in many advanced economies, financial depth amplifies consumption and investment volatility. We also find strong evidence that deeper financial systems serve as shock absorbers, mitigating the negative effects of real external shocks on macroeconomic volatility. This smoothing effect is particularly pronounced for consumption volatility in environments of high exposure - when trade and financial openness are high - suggesting significant gains from further financial deepening in developing countries.
Growth From International Capital Flows
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Author : Antu Panini Murshid
language : en
Publisher: International Monetary Fund
Release Date : 2011-04-01
Growth From International Capital Flows written by Antu Panini Murshid and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2011-04-01 with Business & Economics categories.
Recent commentary has downplayed the growth dividend from international financial integration, highlighting the possibly negative correlation between capital inflows and long-run growth. This paper presents new evidence consistent with standard economic theory and a more benign interpretation of cross-border private capital flows. The key observation is that a country’s growth volatility changes over time. With volatility below a threshold, an inflow of foreign capital has promoted growth. However, during periods of volatile growth, more flows have been associated with slower growth. Volatility levels and changes reflect an interaction of domestic production and institutional structures with global factors.
Non Linear Relationship Between Financial Development Economic Growth And Growth Volatility
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Author : Oro Ufuo Oro
language : en
Publisher:
Release Date : 2018
Non Linear Relationship Between Financial Development Economic Growth And Growth Volatility written by Oro Ufuo Oro and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2018 with categories.
The relationship between economic growth, growth volatility and financial sector development continues to attract attention in the theoretical and empirical literature. Over time, some studies hypothesize that finance has a causal linear relationship with growth. Recently several other authors contradict this claim and argue that the relationship that exists between finance and growth is nonlinear. We investigate these claims for Nigeria for the period between 1970 and 2015, using semi-parametric econometric methods, Hansen sample splitting techniques and threshold estimator. We observed no evidence of 'Too much finance' as claimed by many researchers in recent times. We show that the relationship between financial development and economic growth is U-shaped. This is equally true for the relationship between financial development and growth volatility. We also discuss policy implications of our findings and recommend financial innovations and decentralization of stock exchanges to boost access to financial services, in addition, improved regulation to enhance financial market efficiency.
The Political Dimension Of Economic Growth
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Author : Silvio Borner
language : en
Publisher: Springer
Release Date : 1998-04-12
The Political Dimension Of Economic Growth written by Silvio Borner and has been published by Springer this book supported file pdf, txt, epub, kindle and other format this book has been release on 1998-04-12 with Political Science categories.
The state and its institutions are crucial for economic development: for better and for worse. This insight informs this important, up-to-date and authoritative survey of new trends in growth economics and the widely divergent economic performance of developing countries - for example, between Latin America and South-east Asia - which seemed to be similarly placed just a generation ago. The decisive role of the political dimension in economic growth seems clear but there are many challenges to be met in getting an analytical handle on the precise determinants and in testing empirically for this. This is the challenge taken up by the international team of contributors.