Policy Volatility and Growth

Policy Volatility and Growth

A growing body of recent macroeconomic evidence suggests that volatility is detrimental to economic growth. The channels through which volatility affects growth, however, are less clear; substantive evidence based on disaggregate data is almost non-existent. This paper offers a framework in which policy volatility has an adverse effect on firms' entry into productive industries, thereby affecting economic growth. Empirical support for this relationship is based on a detailed dataset of thousands of firms from some 80 countries. Additional evidence is provided on the channels through which volatility affects firm growth, showing that institutional obstacles magnify the effect.

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Bibliographic Details
Main Author: Inter-American Development Bank
Other Authors: Mark Gradstein
Format: Working Papers biblioteca
Language:English
Published: Inter-American Development Bank
Subjects:Economy, WP-578,
Online Access:http://dx.doi.org/10.18235/0010868
https://publications.iadb.org/en/policy-volatility-and-growth
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spelling dig-bid-node-100382024-05-30T20:25:17ZPolicy Volatility and Growth 2006-08-14T00:00:00+0000 http://dx.doi.org/10.18235/0010868 https://publications.iadb.org/en/policy-volatility-and-growth Inter-American Development Bank Economy WP-578 A growing body of recent macroeconomic evidence suggests that volatility is detrimental to economic growth. The channels through which volatility affects growth, however, are less clear; substantive evidence based on disaggregate data is almost non-existent. This paper offers a framework in which policy volatility has an adverse effect on firms' entry into productive industries, thereby affecting economic growth. Empirical support for this relationship is based on a detailed dataset of thousands of firms from some 80 countries. Additional evidence is provided on the channels through which volatility affects firm growth, showing that institutional obstacles magnify the effect. Inter-American Development Bank Mark Gradstein Alberto E. Chong Working Papers application/pdf IDB Publications en
institution BID
collection DSpace
country Estados Unidos
countrycode US
component Bibliográfico
access En linea
databasecode dig-bid
tag biblioteca
region America del Norte
libraryname Biblioteca Felipe Herrera del BID
language English
topic Economy
WP-578
Economy
WP-578
spellingShingle Economy
WP-578
Economy
WP-578
Inter-American Development Bank
Policy Volatility and Growth
description A growing body of recent macroeconomic evidence suggests that volatility is detrimental to economic growth. The channels through which volatility affects growth, however, are less clear; substantive evidence based on disaggregate data is almost non-existent. This paper offers a framework in which policy volatility has an adverse effect on firms' entry into productive industries, thereby affecting economic growth. Empirical support for this relationship is based on a detailed dataset of thousands of firms from some 80 countries. Additional evidence is provided on the channels through which volatility affects firm growth, showing that institutional obstacles magnify the effect.
author2 Mark Gradstein
author_facet Mark Gradstein
Inter-American Development Bank
format Working Papers
topic_facet Economy
WP-578
author Inter-American Development Bank
author_sort Inter-American Development Bank
title Policy Volatility and Growth
title_short Policy Volatility and Growth
title_full Policy Volatility and Growth
title_fullStr Policy Volatility and Growth
title_full_unstemmed Policy Volatility and Growth
title_sort policy volatility and growth
publisher Inter-American Development Bank
url http://dx.doi.org/10.18235/0010868
https://publications.iadb.org/en/policy-volatility-and-growth
work_keys_str_mv AT interamericandevelopmentbank policyvolatilityandgrowth
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