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What Makes Growth Sustained?

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  • Jonathan David Ostry
  • Andrew Berg
  • Jeromin Zettelmeyer

Abstract

We identify structural breaks in economic growth in 140 countries and use these to define "growth spells:" periods of high growth preceded by an upbreak and ending either with a downbreak or with the end of the sample. Growth spells tend to be shorter in African and Latin American countries than elsewhere. We find that growth duration is positively related to: the degree of equality of the income distribution; democratic institutions; export orientation (with higher propensities to export manufactures, greater openness to FDI, and avoidance of exchange rate overvaluation favorable for duration); and macroeconomic stability (with even moderate instability curtailing growth duration).

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Bibliographic Info

Paper provided by International Monetary Fund in its series IMF Working Papers with number 08/59.

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Length: 33
Date of creation: 01 Mar 2008
Date of revision:
Handle: RePEc:imf:imfwpa:08/59

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Keywords: Economic growth; Income distribution; Trade; Foreign direct investment; terms of trade; inflation; terms of trade shocks; external shocks; trade shocks; trade liberalization; export structure; political economy; export orientation; per capita income; trade openness; monetary economics; inflation rates; macroeconomic stability; domestic savings; current account balance; investor protection; high inflation; terms of trade improvement; east asian miracle; moderate ? inflation; price level; current account surplus; national policies; trade integration; low inflation; liberalized trade; export markets; effects of inflation; variable ? inflation; factor endowments; global integration; domestic investment; effect of inflation; trade growth; lower inflation;

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