Growth, Volatility and Political Instability: Non-Linear Time-Series Evidence for Argentina, 1896-2000
AbstractWhat is the relationship between economic growth and its volatility? Does political instability affect growth directly or indirectly, through volatility? This paper tries to answer such questions using a power-ARCH framework with annual time series data for Argentina from 1896 to 2000. We show that while assassinations and strikes (what we call “informal” political instability) have a direct negative effect on economic growth, “formal” political instability (constitutional and legislative changes) has an indirect (through volatility) negative impact. We also find preliminary support for the idea that while the effects of “formal” instability are stronger in the long-run, those of “informal” instability are stronger in the short-run.
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Bibliographic InfoPaper provided by Centre for Economic Development and Institutions(CEDI), Brunel University in its series CEDI Discussion Paper Series with number 07-12.
Length: 10 pages
Date of creation: Sep 2007
Date of revision:
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Other versions of this item:
- Campos, Nauro F. & Karanasos, Menelaos G., 2008. "Growth, volatility and political instability: Non-linear time-series evidence for Argentina, 1896-2000," Economics Letters, Elsevier, vol. 100(1), pages 135-137, July.
- Campos, Nauro F & Karanasos, Menelaos, 2007. "Growth, Volatility and Political Instability: Non-Linear Time-Series Evidence for Argentina, 1896-2000," CEPR Discussion Papers 6524, C.E.P.R. Discussion Papers.
- Campos, Nauro F & Karanasos, Menelaos G., 2007. "Growth, Volatility and Political Instability: Non-Linear Time-Series Evidence for Argentina, 1896–2000," IZA Discussion Papers 3087, Institute for the Study of Labor (IZA).
- C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
- D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- E23 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Production
- O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
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