IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this article

The Effect Of Economic Freedom On Business Cycle Volatility: Case Of Developing Countries

Listed author(s):
  • Nabil ALIMI

    ()

    (Université de Tunis El Manar)

Registered author(s):

    Few studies have analyzed the effect of economic freedom on busi-ness cycle volatility. The objective of this paper is to examine the relationship between economic freedom and volatility cycles of 109 developing countries over the period 1995-2012. Using Generalized Method of Moments (GMM) estimators we prove that greater economic freedom leads to less business cycle volatility. Yet, this link is not statistically significant for all different income level groups.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL: http://region-developpement.univ-tln.fr/fr/pdf/R43/6_Alimi.pdf
    Download Restriction: no

    Article provided by Region et Developpement, LEAD, Universite du Sud - Toulon Var in its journal Région et Développement.

    Volume (Year): 43 (2016)
    Issue (Month): ()
    Pages: 139-158

    as
    in new window

    Handle: RePEc:tou:journl:v:43:y:2016:p:139-158
    Contact details of provider: Web page: http://regionetdeveloppement.org/
    Email:


    More information through EDIRC

    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.:

    as
    in new window


    1. Philippe Aghion & Nick Bloom & Richard Blundell & Rachel Griffith & Peter Howitt, 2005. "Competition and Innovation: an Inverted-U Relationship," The Quarterly Journal of Economics, Oxford University Press, vol. 120(2), pages 701-728.
    2. Marianne Baxter & Robert G. King, 1999. "Measuring Business Cycles: Approximate Band-Pass Filters For Economic Time Series," The Review of Economics and Statistics, MIT Press, vol. 81(4), pages 575-593, November.
    3. Jakob De Haan & Susanna Lundström & Jan-Egbert Sturm, 2006. "Market-oriented institutions and policies and economic growth: A critical survey," Journal of Economic Surveys, Wiley Blackwell, vol. 20(2), pages 157-191, April.
    4. Julian di Giovanni & Andrei A. Levchenko, 2009. "Trade Openness and Volatility," The Review of Economics and Statistics, MIT Press, vol. 91(3), pages 558-585, August.
    5. Acemoglu, Daron & Johnson, Simon & Robinson, James & Thaicharoen, Yunyong, 2003. "Institutional causes, macroeconomic symptoms: volatility, crises and growth," Journal of Monetary Economics, Elsevier, vol. 50(1), pages 49-123, January.
    6. 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 1138-1151, December.
    7. Julian di Giovanni & Andrei A. Levchenko, 2012. "The Risk Content of Exports: A Portfolio View of International Trade," NBER International Seminar on Macroeconomics, University of Chicago Press, vol. 8(1), pages 97-151.
    8. Kydland, Finn E & Prescott, Edward C, 1982. "Time to Build and Aggregate Fluctuations," Econometrica, Econometric Society, vol. 50(6), pages 1345-1370, November.
    9. Baxter, Marianne & Stockman, Alan C., 1989. "Business cycles and the exchange-rate regime : Some international evidence," Journal of Monetary Economics, Elsevier, vol. 23(3), pages 377-400, May.
    10. Luis Servén, 2003. "ERRATUM: Real-Exchange-Rate Uncertainty and Private Investment in LDCs," The Review of Economics and Statistics, MIT Press, vol. 85(2), pages 492-492, May.
    11. Nabil Alimi, 2015. "The Effect of Trade, Specialization and Financial Integration on Business Cycles Synchronization in Some Mediterranean Countries," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 5(1), pages 110-118, January.
    12. Pritchett, Lant, 2000. "Understanding Patterns of Economic Growth: Searching for Hills among Plateaus, Mountains, and Plains," World Bank Economic Review, World Bank Group, vol. 14(2), pages 221-250, May.
    13. Lisa Chauvet & Patrick Guillaumont, 2009. "Aid, Volatility, and Growth Again: When Aid Volatility Matters and When it Does Not," Review of Development Economics, Wiley Blackwell, vol. 13(s1), pages 452-463, August.
    14. Berggren, Niclas, 2003. "The Benefits of Economic Freedom: A Survey," Ratio Working Papers 4, The Ratio Institute.
    15. Afonso, António & Furceri, Davide, 2010. "Government size, composition, volatility and economic growth," European Journal of Political Economy, Elsevier, vol. 26(4), pages 517-532, December.
    16. Terence C. Mills, 2000. "Business Cycle Volatility and Economic Growth: A Reassessment," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 23(1), pages 107-116, October.
    17. Fabrizio Carmignani & Emilio Colombo & Patrizio Tirelli, 2007. "Public expenditure and growth volatility: do "globalisation" and institutions matter?," Working Papers 116, University of Milano-Bicocca, Department of Economics, revised 2007.
    18. Kose, M. Ayhan, 2002. "Explaining business cycles in small open economies: 'How much do world prices matter?'," Journal of International Economics, Elsevier, vol. 56(2), pages 299-327, March.
    19. Dan Andrews & Daniel Rees, 2009. "Macroeconomic Volatility and Terms of Trade Shocks," RBA Research Discussion Papers rdp2009-05, Reserve Bank of Australia.
    20. Robert E. Hall & Charles I. Jones, 1999. "Why do Some Countries Produce So Much More Output Per Worker than Others?," The Quarterly Journal of Economics, Oxford University Press, vol. 114(1), pages 83-116.
    21. Luis Servén, 2003. "Real-Exchange-Rate Uncertainty and Private Investment in LDCS," The Review of Economics and Statistics, MIT Press, vol. 85(1), pages 212-218, February.
    22. Morris Altman, 1992. "Business Cycle Volatility in Developed Market Economies, 1870-1986: Revisions and Conjectures," Eastern Economic Journal, Eastern Economic Association, vol. 18(3), pages 259-275, Summer.
    23. Caballero, Ricardo J & Hammour, Mohamad L, 1994. "The Cleansing Effect of Recessions," American Economic Review, American Economic Association, vol. 84(5), pages 1350-1368, December.
    24. repec:dau:papers:123456789/5400 is not listed on IDEAS
    25. Romain Rancière & Aaron Tornell & Frank Westermann, 2008. "Systemic Crises and Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 123(1), pages 359-406.
    26. Morris Altman & I. Biefang-Frisancho Mariscal, 1995. "Business Cycle Volatility and Economic Growth: The Historical Record, 1870-1986," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 17(4), pages 561-577, July.
    27. Balke, Nathan S & Gordon, Robert J, 1989. "The Estimation of Prewar Gross National Product: Methodology and New Evidence," Journal of Political Economy, University of Chicago Press, vol. 97(1), pages 38-92, February.
    28. Aghion, Philippe & Saint-Paul, Gilles, 1998. "VIRTUES OF BAD TIMES Interaction Between Productivity Growth and Economic Fluctuations," Macroeconomic Dynamics, Cambridge University Press, vol. 2(03), pages 322-344, September.
    29. Raddatz, Claudio, 2007. "Are external shocks responsible for the instability of output in low-income countries?," Journal of Development Economics, Elsevier, vol. 84(1), pages 155-187, September.
    30. Imbs, Jean, 2002. "Why the Link Between Volatility and Growth is Both Positive and Negative," CEPR Discussion Papers 3561, C.E.P.R. Discussion Papers.
    31. Harvey, A C, 1985. "Trends and Cycles in Macroeconomic Time Series," Journal of Business & Economic Statistics, American Statistical Association, vol. 3(3), pages 216-227, June.
    32. Allen C. Head, 1995. "Country Size, Aggregate Fluctuations, and International Risk Sharing," Canadian Journal of Economics, Canadian Economics Association, vol. 28(4b), pages 1096-1119, November.
    33. Joël CARIOLLE, 2012. "Measuring macroeconomic volatility - Applications to export revenue data, 1970-2005," Working Papers I14, FERDI.
    34. Enrique G. Mendoza & Guillermo A. Calvo, 2000. "Capital-Markets Crises and Economic Collapse in Emerging Markets: An Informational-Frictions Approach," American Economic Review, American Economic Association, vol. 90(2), pages 59-64, May.
    35. Nelson, Charles R. & Plosser, Charles I., 1982. "Trends and random walks in macroeconmic time series : Some evidence and implications," Journal of Monetary Economics, Elsevier, vol. 10(2), pages 139-162.
    36. Jody W. Lipford, 2007. "Short Run Macroeconomic Performance and Economic Freedom: Can Economic Growth Rates be Higher and More Stable?," Journal of Private Enterprise, The Association of Private Enterprise Education, vol. 23(Fall 2007), pages 3-29.
    Full references (including those not matched with items on IDEAS)

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:tou:journl:v:43:y:2016:p:139-158. 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: (Christophe Van Huffel)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.