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Volatility and growth in developing countries: An asymmetric effect

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  • Alimi, Nabil

Abstract

This paper investigates the relationship between macroeconomic volatility and growth and the determination of a threshold from which there is a reversal of the nature of this relationship in a panel of 47 developing countries over the period 1980–2013. Using Hansen (2000) methodology our findings prove that the relationship between macroeconomic volatility on economic growth is not linear and it looks like reversed Laffer curve as long as the volatility is below 4%.

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  • Alimi, Nabil, 2016. "Volatility and growth in developing countries: An asymmetric effect," The Journal of Economic Asymmetries, Elsevier, vol. 14(PB), pages 179-188.
    • Handle: RePEc:eee:joecas:v:14:y:2016:i:pb:p:179-188
    DOI: 10.1016/j.jeca.2016.08.001
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    More about this item

    Keywords

    Economic volatility; Economic growth; Developing countries; Threshold analysis;
    All these keywords.

    JEL classification:

    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • 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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