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What makes growth sustained?

  • Andrew Berg

    (IMF)

  • Jonathan D. Ostry

    (IMF)

  • Jeromin Zettelmeyer

    (EBRD)

We identify structural breaks in economic growth in 140 countries and use these to define “growth spells”: periods of high growth preceded by an upbreak and ending either with a downbreak or with the end of the sample. Growth spells tend to be shorter in African and Latin American countries than elsewhere. We find evidence that growth duration is positively related to: the degree of equality of the income distribution; democratic institutions; export orientation (with higher propensities to export manufactured goods, greater openness to FDI and avoidance of exchange rate overvaluation favorable for duration); and macroeconomic stability. The findings of this paper back the notion that “inclusive” economic transformations are more likely to lead to sustained growth than reforms that go along with rises in income inequality.

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Paper provided by European Bank for Reconstruction and Development, Office of the Chief Economist in its series Working Papers with number 133.

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Length: 47 pages
Date of creation: Jul 2011
Date of revision:
Publication status: Published in Working papers 133, European Bank for Reconstruction and Development
Handle: RePEc:ebd:wpaper:133
Contact details of provider: Postal: One Exchange Square, London EC2A 2JN
Web page: http://www.ebrd.com/pages/research/publications/workingpapers.shtml

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