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Does uncertainty affect economic growth? : an empirical analysis

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Author Info
Lensink, Robert
Bo, Hong
Sterken, Elmer (Groningen University)

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Abstract

This paper investigates the effect of uncertainty on economic growth. We construct measures of export uncertainty, government policy uncertainty and price uncertainty to augment a growth model, and using econometric techniques we test for robustness of the effects of these measure on economic growth in a cross-section of 138 developing and developed economies during 1970-1995. The result clearly shows a robust and negative effect of uncertainty on economic growth. These results underline the importance of export stability and policy credibility.

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Paper provided by University of Groningen, CCSO Centre for Economic Research in its series CCSO Working Papers with number 199902.

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Date of creation: 1999
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Handle: RePEc:dgr:rugccs:199902

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  1. Jean-Louis Combes & Tahsin Saadi-Sedik, 2006. "How does trade openness influence budget deficits in developing countries?," The Journal of Development Studies, Taylor and Francis Journals, vol. 42(8), pages 1401-1416, November. [Downloadable!] (restricted)
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  2. Maria Abreu & Henri L.F. de Groot & Raymond J.G.M. Florax, 2005. "A Meta-Analysis of Beta-Convergence: The Legendary Two-Percent," Tinbergen Institute Discussion Papers 05-001/3, Tinbergen Institute. [Downloadable!]
  3. Gerald Stuber, 2001. "Implications of Uncertainty about Long-Run Inflation and the Price Level," Working Papers 01-16, Bank of Canada. [Downloadable!]
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