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A note on the macroeconomic consequences of ethnic/racial tension

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  • Arin, K. Peren
  • Koyuncu, Murat
  • Spagnolo, Nicola

Abstract

While many studies stressed the importance of ethnic fractionalization on long-term economic growth, neither ethnic fractionalization always leads to ethnic conflict nor the intensity of conflict is constant over time. To address this potential bias, we construct an ethnic/racial tension index by using the number of US news articles that contain certain keywords. Utilizing this index we test the predictions of a simple theoretical model in a Markov Switching framework which allows to identify the impact of ethnic/racial tension in different states of the economy. Consistent with our theoretical predictions, results show that the magnitude of the impact of ethnic/racial tension is larger during low-growth periods.

Suggested Citation

  • Arin, K. Peren & Koyuncu, Murat & Spagnolo, Nicola, 2017. "A note on the macroeconomic consequences of ethnic/racial tension," Economics Letters, Elsevier, vol. 155(C), pages 100-103.
    • Handle: RePEc:eee:ecolet:v:155:y:2017:i:c:p:100-103
    DOI: 10.1016/j.econlet.2017.02.015
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    References listed on IDEAS

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    Cited by:

    1. K. Kıvanç Aköz & K. Peren Arın & Christina Zenker, 2022. "On the labor market effects of salience of ethnic/racial disputes," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 24(2), pages 348-361, April.

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    More about this item

    Keywords

    Ethnic tension; Markov Switching; News; Racial tension;
    All these keywords.

    JEL classification:

    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • P48 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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