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Who Is Afraid Of Political Instability?

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  • Nauro F. Campos

    (CERGE-EI)

  • Jeffrey B. Nugent

    (University of Southern California)

Abstract

An unstable macroeconomic environment is often regarded as detrimental to economic growth. Among the sources contributing to such instability, much of the blame has been assigned to political issues. This paper empirically tests for a causal and negative long-run relationship between political instability and economic growth but finds no such relationship. Sensitivity analysis, however, indicates that there is indeed a short-run negative relationship and, that in the long-run and ignoring institutional factors, the group of African countries is the driving force. In other words, we suspect that excluding the African countries from their samples, results of a negative relation between SPI and growth would founder.

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File URL: http://128.118.178.162/eps/dev/papers/0012/0012016.pdf
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Bibliographic Info

Paper provided by EconWPA in its series Development and Comp Systems with number 0012016.

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Length: 20 pages
Date of creation: 23 Feb 2001
Date of revision:
Handle: RePEc:wpa:wuwpdc:0012016

Note: Type of Document - Acrobat PDF; pages: 20 ; figures: included
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Web page: http://128.118.178.162

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Keywords: Economic growth; Political instability; Granger causality;

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