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dc.date2014-12
dc.date.available2015-11-06T16:24:58Z
dc.date.issued2014-12
dc.identifier.issn0176-2680
dc.identifier.urihttp://hdl.handle.net/10784/7520
dc.description.abstractThere exists a persistent disagreement in the literature over the effect of business cycles on economic growth. This paper offers a solution to this disagreement, suggesting that volatility carries not only a positive direct effect, but also a negative indirect effect, operating through the insurance mechanism of government size. Theoretically, the net growth effect of volatility is then ambiguous. The paper reveals the underlying endogeneity of government size in a balanced panel of 90 countries from 1961 to 2010. In practice, the negative indirect channel dominates in democracies, but with less power to choose public services in autocratic regimes the positive direct effect takes over. Consequently, volatile growth rates are detrimental to growth in democracies, but beneficial to growth in autocracies. The empirical results suggest that a one standard deviation increase of volatility lowers growth by up to 0.52 percentage points in a democracy, but raises growth by 1.66 percentage points in a total autocracy. These findings point to a crucial intermediating role of governments in the relationship between volatility and growth. Both the size of the public sector and the regime form assume key roleseng
dc.language.isoengeng
dc.publisherElseviereng
dc.relation.ispartofEuropean Journal of Political Economy. Vol.36, 2014, pp.71-88spa
dc.relation.isversionofhttp://www-scopus-com.ezproxy.eafit.edu.co/record/display.url?eid=2-s2.0-84905219725&origin=resultslist&sort=plf-f&src=s&st1=Volatility+and+growth%3a+Governments&nlo=&nlr=&nls=&sid=8FC5ABD49C53D4E724220028260B6456.zQKnzAySRvJOZYcdfIziQ%3a310&sot=b&sdt=sisr&sl=49&s=TITLE-ABS-KEY%28Volatility+and+growth%3a+Governments%29&ref=%28Volatility+and+growth%3a+Governments+are+key%29&relpos=2&relpos=2&citeCnt=1&searchTerm=%28TITLE-ABS-KEY%28Volatility+and+growth%3A+Governments%29%29+AND+%28Volatility+and+growth%3A+Governments+are+key%29
dc.relation.urihttp://www-scopus-com.ezproxy.eafit.edu.co/record/display.url?eid=2-s2.0-84905219725&origin=resultslist&sort=plf-f&src=s&st1=Volatility+and+growth%3a+Governments&nlo=&nlr=&nls=&sid=8FC5ABD49C53D4E724220028260B6456.zQKnzAySRvJOZYcdfIziQ%3a310&sot=b&sdt=sisr&sl=49&s=TITLE-ABS-KEY%28Volatility+and+growth%3a+Governments%29&ref=%28Volatility+and+growth%3a+Governments+are+key%29&relpos=2&relpos=2&citeCnt=1&searchTerm=%28TITLE-ABS-KEY%28Volatility+and+growth%3A+Governments%29%29+AND+%28Volatility+and+growth%3A+Governments+are+key%29
dc.rightsrestrictedAccesseng
dc.rights© 2014 Elsevier B.V.spa
dc.sourceEuropean Journal of Political Economy. Vol.36, 2014, pp.71-88spa
dc.titleVolatility and growth: Governments are keyeng
dc.typearticleeng
dc.typeinfo:eu-repo/semantics/articleeng
dc.typeinfo:eu-repo/semantics/publishedVersioneng
dc.rights.accessrightsinfo:eu-repo/semantics/restrictedAccesseng
dc.type.localArtículospa
dc.subject.keywordBusiness cycleseng
dc.subject.keywordEconomic growtheng
dc.subject.keywordGovernment sizeeng
dc.subject.keywordRegime formeng
dc.subject.keywordVolatilityeng
dc.rights.localAcceso restringidospa
dc.date.accessioned2015-11-06T16:24:58Z
dc.type.hasVersionObra publicadaspa
dc.type.hasVersionpublishedVersioneng
dc.contributor.departmentEscuela de Economía y Finanzasspa
dc.contributor.departmentEconomíaspa
dc.contributor.authorJetter, Michaelspa
dc.citation.journalTitleEuropean Journal of Political Economyeng
dc.citation.volume36
dc.citation.spage71
dc.citation.epage88
dc.identifier.doi10.1016/j.ejpoleco.2014.07.005
dc.contributor.affiliationDepartment of Economics, School of Economics and Finance, Universidad EAFIT, Carrera 49 7 Sur-50, Avenida Las Vegas, Medellín, Colombia, IZA, Bonn, Germanyspa
dc.contributor.programEstudios en Economía y Empresaspa


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