The Empirical Volatility-Growth Relationship: Is Economic Freedom the Missing Link?
نویسنده
چکیده
This paper examines the role of economic freedom in the empirical relationship between business cycle volatility and long-run growth across countries. In a diverse sample of 99 countries, it is shown that accounting for economic freedom’s influence on volatility mitigates or even eliminates the negative impact of volatility on growth. It is also possible that the impact of volatility on growth is not homogeneous across countries with different levels of freedom. In particular, volatility appears more likely to have a negative impact on growth in countries at low levels of economic freedom. These findings are consistent with “circumstantial” evidence available in other studies, but there was no clear evidence that economic freedom was the missing link. JEL classifications: E32, O43
منابع مشابه
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