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Growth and Volatility

Author

Listed:
  • Jean Imbs

    (Center for Economic Research - CEPR, HEC Lausanne - Faculté des Hautes Etudes Commerciales (HEC Lausanne), Swiss Finance Institute [Geneva] - Swiss Finance Institute)

Abstract

Growth and volatility correlate negatively across countries, but positively across sectors. Analytically, whether or not sectoral growth and volatility are correlated positively is irrelevant in the aggregate. Cross-country estimates identify the detrimental effects of macroeconomic volatility on growth, but they cannot be used to dismiss theories implying a positive growth-volatility coefficient, which appear to hold in sectoral data. In particular, volatile sectors command high investment rates, as they would in a mean-variance framework.

Suggested Citation

  • Jean Imbs, 2007. "Growth and Volatility," Post-Print hal-00612554, HAL.
  • Handle: RePEc:hal:journl:hal-00612554
    DOI: 10.1016/j.jmoneco.2006.08.001
    Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-00612554
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    References listed on IDEAS

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    More about this item

    Keywords

    Sectors; Growth; Volatility;
    All these keywords.

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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