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Growth and Volatility

Listed author(s):
  • Jean Imbs

    (Center for Economic Research - CEPR, HEC, Lausanne - Department of Economics, Swiss Finance Institute [Geneva] - Swiss Finance Institute)

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.

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Paper provided by HAL in its series Post-Print with number hal-00612554.

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Date of creation: Oct 2007
Publication status: Published in Journal of Monetary Economics, Elsevier, 2007, 54 (7), pp.1848-1862. <10.1016/j.jmoneco.2006.08.001>
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
Contact details of provider: Web page: https://hal.archives-ouvertes.fr/

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