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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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Publisher Info
Paper provided by University of Groningen, Research Institute SOM (Systems, Organisations and Management) in its series Research Report with number 99E23.

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Date of creation: 1999
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Handle: RePEc:dgr:rugsom:99e23

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