De riesgo y pánico: una analítica de volatilidad y crecimiento 1960-2006
[About risk and panic, an overview of volatility and growth 1960-2006]
AbstractIt has long been believed that commodity price variability causes problems for primary producing and dependent countries. This paper tests the effects of price uncertainty (volatility) on economic growth. The model is constructed using a yearly panel data for the ten biggest countries in South America. The results show that output per worker varies enormously across countries, even within the region. Our analysis shows that exogenous shocks continue having a significant negative effect on growth on developing countries. Despite volatility series are not constant through time, we found a homogenous negative effect within the region, but it is heterogeneous when we apply a causality test. The effect is commonly observed in economic time series and it shows that growth rates are significantly reduced by large discrete negative commodity price shocks. Our analysis documented that the impact on productivity (output per worker) is driven through capital formation and foreign investment, as well as, by differences in what we call ‘social infrastructure’ (i.e. institutions and government policies).
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 21577.
Date of creation: Jun 2007
Date of revision:
Volatility; terms of trade; Latin America;
Find related papers by JEL classification:
- O54 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean
- F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
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