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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 52230.

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Date of creation: 2013
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Publication status: Published in Communist and Post-Communist Studies 2.46(2013): pp. 189-202
Handle: RePEc:pra:mprapa:52230

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Keywords: political instability; economic growth; CEE transition economies;

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