Growth and Macroeconomic Fluctuations: The Case of Latin America
Based on time-series from 1960 to 1995, we show the existence –for Latin American countries– of a short and long run negative correlation between economic growth and uncertainty. The probable cause of such relationship is time-variant; it is only after 1990 that investment-based theories on the link between uncertainty and growth cannot be rejected by the data. Further, the data cannot support the claim that government expenditure explains the correlation between growth and uncertainty. Our results suggest that the average growth rate is endogenous to policy innovations. This implies that the long-run depends on short-run movements in activity, thereby casting some doubts on the conventional wisdom that assumes the dichotomy between an invariant steady state path and fluctuations around it.
Volume (Year): IX (2000)
Issue (Month): 1 (January-June)
|Contact details of provider:|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Garey Ramey & Valerie A. Ramey, 1994.
"Cross-Country Evidence on the Link Between Volatility and Growth,"
NBER Working Papers
4959, National Bureau of Economic Research, Inc.
- Ramey, Garey & Ramey, Valerie A, 1995. "Cross-Country Evidence on the Link between Volatility and Growth," American Economic Review, American Economic Association, vol. 85(5), pages 1138-51, December.
- Michael Gavin & Ricardo Hausmann & Roberto Perotti & Ernesto Talvi, 1996. "Managing Fiscal Policy in Latin America and the Caribbean: Volatility, Procyclicality, and Limited Creditworthiness," Research Department Publications 4032, Inter-American Development Bank, Research Department.
- Blanchard, Olivier, 1997. "Is There a Core of Usable Macroeconomics?," American Economic Review, American Economic Association, vol. 87(2), pages 244-46, May.
- Glewwe, Paul, 1996. "The relevance of standard estimates of rates of return to schooling for education policy: A critical assessment," Journal of Development Economics, Elsevier, vol. 51(2), pages 267-290, December.
- Summers, Robert & Heston, Alan, 1991. "The Penn World Table (Mark 5): An Expanded Set of International Comparisons, 1950-1988," The Quarterly Journal of Economics, MIT Press, vol. 106(2), pages 327-68, May.
- Sanyal, Kalyan K & Jones, Ronald W, 1982. "The Theory of Trade in Middle Products," American Economic Review, American Economic Association, vol. 72(1), pages 16-31, March.
When requesting a correction, please mention this item's handle: RePEc:emc:ecomex:v:9:y:2000:i:1:p:41-59. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ricardo Tiscareño)
If references are entirely missing, you can add them using this form.