Is growth exogenous? Evidence from the 1970s and 1980s
Author: Rebucci, Alessandro
Source: Applied Economics, Volume 42, Number 5, February 2010 , pp. 535-543(9)
Abstract:This article assesses the role of external and policy factors for growth variability. The mean group estimator is used to estimate a vector autoregressive system on a panel data set of eighteen developing economies from 1965 to 1992. The main findings are that (i) temporary external shocks are an important determinant of medium to long-run growth variability (ii) high inflation countries are more vulnerable to external shocks than others. This evidence is supportive of the conventional view that macro-economic stability is conducive to growth, and casts doubts on the idea that the growth process might be largely exogenous.
Document Type: Research article
Publication date: 2010-02-01