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Panel Data Evidence on the Role of Education in the Growth-Volatility Relationship

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  • Abbi M Kedir

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  • Nor Yasmin Mhd Bani
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    Abstract

    The investigation of the growth-volatility link is an important one in empirical macroeconomics. There is no empirical evidence supporting the predictions of recent theoretical models that incorporate and explicitly recognize the role of human capital in this link. Using a panel data, we show empirically how the detrimental effect of output volatility on growth is diluted by education. We provide robustness checks and policy implications of our finding.

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    File URL: http://www.le.ac.uk/economics/research/repec/lec/leecon/dp12-04.pdf
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    Bibliographic Info

    Paper provided by Department of Economics, University of Leicester in its series Discussion Papers in Economics with number 12/04.

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    Date of creation: Mar 2012
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    Handle: RePEc:lec:leecon:12/04

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    Keywords: Growth; volatility; education; dynamic system (GMM).;

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    1. K Blackburn & R Galindev, 2003. "Growth, Volatility and Learning," The School of Economics Discussion Paper Series 0303, Economics, The University of Manchester.
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    8. Badi H. Baltagi & Panicos O. Demetriades & Siong Hook Law, 2008. "Financial Development and Openness: Evidence from Panel Data," Center for Policy Research Working Papers 107, Center for Policy Research, Maxwell School, Syracuse University.
    9. Badinger, Harald, 2010. "Output volatility and economic growth," Economics Letters, Elsevier, vol. 106(1), pages 15-18, January.
    10. Dotsey, Michael & Sarte, Pierre Daniel, 2000. "Inflation uncertainty and growth in a cash-in-advance economy," Journal of Monetary Economics, Elsevier, vol. 45(3), pages 631-655, June.
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    13. Dimitrios Varvarigos, 2007. "Policy Variability, Productive Spending and Growth," Economica, London School of Economics and Political Science, vol. 74(294), pages 299-313, 05.
    14. Caporale, Tony & McKiernan, Barbara, 1998. "Interest Rate Uncertainty and the Founding of the Federal Reserve," The Journal of Economic History, Cambridge University Press, vol. 58(04), pages 1110-1117, December.
    15. Blackburn, Keith & Galindev, Ragchaasuren, 2003. "Growth, volatility and learning," Economics Letters, Elsevier, vol. 79(3), pages 417-421, June.
    16. K Blackburn & R Galindev, 2003. "Growth, volatility and learning," Centre for Growth and Business Cycle Research Discussion Paper Series 25, Economics, The Univeristy of Manchester.
    17. Blackburn, Keith & Pelloni, Alessandra, 2004. "On the relationship between growth and volatility," Economics Letters, Elsevier, vol. 83(1), pages 123-127, April.
    18. Keith Blackburn & Dimitrios Varvarigos, 2008. "Human capital accumulation and output growth in a stochastic environment," Economic Theory, Springer, vol. 36(3), pages 435-452, September.
    19. Amparo Castello & Rafael Domenech, 2002. "Human Capital Inequality and Economic Growth: Some New Evidence," Economic Journal, Royal Economic Society, vol. 112(478), pages C187-C200, March.
    20. Bassanini, Andrea & Scarpetta, Stefano, 2002. "Does human capital matter for growth in OECD countries? A pooled mean-group approach," Economics Letters, Elsevier, vol. 74(3), pages 399-405, February.
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