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Political instability and economic growth: Evidence from two decades of transition in CEE

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  • Gurgul, Henryk
  • Lach, Łukasz

Abstract

This paper examines the nexus between political instability and economic growth in 10 CEE countries in transition in the period 1990-2009. Our results support the contention that political instability defined as a propensity for government change had a negative impact on growth. On the other hand, there was no causality in the opposite direction. A sensitivity analysis based on the application of a few hundred different variants of the initial econometric model confirmed the abovementioned findings only in the case where major government changes were applied to the definition of political instability.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 37792.

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Date of creation: 01 Mar 2012
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Handle: RePEc:pra:mprapa:37792

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Keywords: economic growth; political instability; CEE economies;

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