Forms of democracy and economic growth volatility

Mathonnat, Clément; Minea, Alexandru

doi:10.1016/j.econmod.2018.07.013

Cited by 22 publications

(18 citation statements)

References 35 publications

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“…Scholars have explored the role of openness to foreign trade, financial integration, and foreign direct investment [ 29 , 30 ]. There are also studies examining the impact of political factors (forms of government, electoral rules, forms of state, number of veto players, and age of democracy) on the growth–volatility relationship [ 31 ]. Finally, an important strand of research is devoted to the financial development channel.…”

Section: Literature Reviewmentioning

confidence: 99%

Examining GDP Growth and Its Volatility: An Episodic Approach

Barták

Jabłoński

Jastrzębska

2021

Entropy

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In this paper, we study economic growth and its volatility from an episodic perspective. We first demonstrate the ability of the genetic algorithm to detect shifts in the volatility and levels of a given time series. Having shown that it works well, we then use it to detect structural breaks that segment the GDP per capita time series into episodes characterized by different means and volatility of growth rates. We further investigate whether a volatile economy is likely to grow more slowly and analyze the determinants of high/low growth with high/low volatility patterns. The main results indicate a negative relationship between volatility and growth. Moreover, the results suggest that international trade simultaneously promotes growth and increases volatility, human capital promotes growth and stability, and financial development reduces volatility and negatively correlates with growth.

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Section: Literature Reviewmentioning

confidence: 99%

Examining GDP Growth and Its Volatility: An Episodic Approach

Barták

Jabłoński

Jastrzębska

2021

Entropy

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“… Independent variable : Domestic tourism spending as a percentage of GDP is used as a proxy for domestic tourism ( DoTour ). Control variables : The study employs the baseline model of economic vulnerability with four control variables: institutional quality ( Inst ), economic growth ( EG ), trade openness ( TO ), and industrialisation ( Industry ), as proposed by previous studies (e.g., see Malik and Temple (2009) , Barrot Araya et al (2016) , Mathonnat and Minea (2018) ). Institutional quality represents the quality of the institutional framework.…”

Section: Methodology and Datamentioning

confidence: 99%

“…In the economics literature, economists have paid huge attention to fluctuations in economic growth and in economic cycles ( Mathonnat & Minea, 2018 ). The vulnerability of the economy, or economic vulnerability, has only been considered in recent decades, but is seen as a broader concept ( Noy & Yonson, 2018 ).…”

Section: Literature Reviewmentioning

confidence: 99%

Domestic tourism spending and economic vulnerability

Nguyen

Thanh

2020

Annals of Tourism Research

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This study examines the influence of domestic tourism on economic vulnerability index (EVI). Domestic tourism spending has a significant effect in reducing EVI. These results are consistent with two sub-indices of EVI (shock index and exposure index). Interestingly, it is found that: (i) this impact is consistent in low- and lower-middle-income countries, while domestic tourism has a non-significantly effect in upper-middle and high-income countries of increasing EVI; (ii) these results are consistent in the long-run; and (iii) the impact of domestic tourism is consistent in both the 2002–2007 and 2008–2012 periods, but is statistically non-significant in the 2013–2017 period. Notably, we find that domestic tourism spending has a U-shape effect on EVI; while international tourism has an increasing effect.

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“…Another interesting area of new studies on institutions-growth nexus refers to the research regarding the influence of institutions not on the absolute level of GDP growth rate, but its volatility. Mathonnat and Minea (2019) discuss the relationship of the democracy and economic growth volatility in the group of 140 countries observed in the 1975-2007 period.…”

Section: Literature Reviewmentioning

confidence: 99%

Time stability of the impact of institutions on economic growth and real convergence of the EU countries: implications from the hidden Markov models analysis

Bernardelli

Próchniak

Witkowski

2021

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Research background: It is not straightforward to identify the role of institutions for the economic growth. The possible unknown or uncertain areas refer to nonlinearities, time stability, transmission channels, and institutional complementarities. The research problem tackled in this paper is the analysis of the time stability of the relationship between institutions and economic growth and real economic convergence. Purpose of the article: The article aims to verify whether the impact of the institutional environment on GDP dynamics was stable over time or diffed in various subperiods. The analysis covers the EU28 countries and the 1995?2019 period. Methods: We use regression equations with time dummies and interactions to assess the stability of the impact of institutions on economic growth. The analysis is based on the partially overlapping observations. The models are estimated with the use of Blundell and Bond?s GMM system estimator. The results are then averaged with the Bayesian Model Averaging (BMA) approach. Structural breaks are identified on the basis of the Hidden Markov Models (HMM). Findings & value added: The value added of the study is threefold. First, we use the HMM approach to find structural breaks. Second, the BMA method is applied to assess the robustness of the outcomes. Third, we show the potential of HMM in foresighting. The results of regression estimates indicate that good institution reflected in the greater scope of economic freedom and better governance lead to the higher economic growth of the EU countries. However, the impact of institutions on economic growth was not stable over time.

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Forms of democracy and economic growth volatility

Cited by 22 publications

References 35 publications

Examining GDP Growth and Its Volatility: An Episodic Approach

Examining GDP Growth and Its Volatility: An Episodic Approach

Domestic tourism spending and economic vulnerability

Time stability of the impact of institutions on economic growth and real convergence of the EU countries: implications from the hidden Markov models analysis

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