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Effects of growth volatility on economic performance – Empirical evidence from Turkey

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Listed author(s):
  • Berument, M. Hakan
  • Dincer, N. Nergiz
  • Mustafaoglu, Zafer

Abstract

This paper examines the relationship between growth and growth volatility for a small open economy with high growth volatility: Turkey. Quarterly data for the period from 1987Q1 to 2007Q3 suggests that growth volatility reduces growth and that this result is robust under different specifications. This paper contributes to the literature by focusing on how growth volatility affects a set of variables that are crucial for growth. Empirical evidence from Turkey suggests that higher growth volatility reduces total factor productivity, investment, and the foreign currency value of local currency (depreciation). Moreover, it increases employment, though the evidence for this is not statistically significant.

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Article provided by Elsevier in its journal European Journal of Operational Research.

Volume (Year): 217 (2012)
Issue (Month): 2 ()
Pages: 351-356

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Handle: RePEc:eee:ejores:v:217:y:2012:i:2:p:351-356
DOI: 10.1016/j.ejor.2011.09.026
Contact details of provider: Web page: http://www.elsevier.com/locate/eor

Keywords: Economics; Sustainability; Growth volatility; Total factor productivity; Investment; Real exchange rate;

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Cited by:

  1. Leandro Maciel & Fernando Gomide & Rosangela Ballini, 2016. "Evolving Fuzzy-GARCH Approach for Financial Volatility Modeling and Forecasting," Computational Economics, Springer;Society for Computational Economics, vol. 48(3), pages 379-398, October.

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