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Economic Vulnerability And Economic Growth: Some Results From A Neo-Classical Growth Modelling Approach

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  • Gordon Cordina

    (Department of Economics, University of Malta)

Abstract

This paper incorporates economic vulnerability, defined as the increased proneness of certain economies to downside risks, within a neo-classical economic growth model to seek an explanation to the observation that a number of vulnerable economies enjoy high per capita output levels. Steady state results indicate that the more vulnerable economy would tend to have a higher per capita capital stock and output but a lower per capita consumption level, as resources are allocated to counteract vulnerability. Dynamic modelling results indicate that vulnerability reduces the speed of convergence between economies at different states of development.

Suggested Citation

  • Gordon Cordina, 2004. "Economic Vulnerability And Economic Growth: Some Results From A Neo-Classical Growth Modelling Approach," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 29(2), pages 21-39, December.
    • Handle: RePEc:jed:journl:v:29:y:2004:i:2:p:21-39
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    References listed on IDEAS

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    Cited by:

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    2. Sèna Kimm Gnangnon, 2012. "Structural Vulnerability and Excessive Public Indebtedness in CFA Franc Zone Countries," Working Papers halshs-00749470, HAL.
    3. Zaman, Gheorghe & Antonescu, Daniela, 2015. "Endogenous regional growth and foreign trade, in Romania," MPRA Paper 64678, University Library of Munich, Germany.
    4. Zaman, Gheorghe & Georgescu, George, 2015. "Resilience to crisis and GDP recovery at county level in Romania," MPRA Paper 63246, University Library of Munich, Germany.
    5. Abdullah Al Mamun & Noorshella Binti Che Nawi & Mohd Asrul Hery Bin Ibrahim & Rajennd Muniady, 2018. "Effect of Economic Vulnerability on Competitive Advantages, Enterprise Performance and Sustainability," Social Sciences, MDPI, vol. 7(4), pages 1-11, April.
    6. Canh, Nguyen Phuc & Thanh, Su Dinh, 2020. "Domestic tourism spending and economic vulnerability," Annals of Tourism Research, Elsevier, vol. 85(C).
    7. Lino Briguglio & Gordon Cordina & Nadia Farrugia & Stephanie Vella, 2009. "Economic Vulnerability and Resilience: Concepts and Measurements," Oxford Development Studies, Taylor & Francis Journals, vol. 37(3), pages 229-247.
    8. Kurt Motamedi, 2021. "Zeal and Z-Factor: Will, Adaptability and Copability in Dynamic Complex Environments," International Journal of Business and Management, International Institute of Social and Economic Sciences, vol. 9(2), pages 36-48, November.
    9. Sèna Kimm Gnangnon, 2012. "Structural Vulnerability and Excessive Public Indebtedness in CFA Franc Zone Countries," CERDI Working papers halshs-00749470, HAL.
    10. Marcela Guachamín & Diana Ramírez‐Cifuentes & Olga Delgado, 2020. "An Uncertainty Thermometer to Measure the Macroeconomic‐Financial Risk in South American Countries," Journal of International Development, John Wiley & Sons, Ltd., vol. 32(6), pages 854-890, August.
    11. Sena Kimm GNANGNON, 2012. "Structural Vulnerability and Excessive Public Indebtedness in CFA Franc Zone Countries," Working Papers 201237, CERDI.
    12. Maria Makabenta Ikeda & Arlene Garces-Ozanne, 2016. "Human Security, Social Competence and Natural Disasters in Japan and New Zealand: A Case study of Filipino migrants," Japan Social Innovation Journal, University of Hyogo Institute for Policy Analysis and Social Innovation, vol. 6(1), pages 1-42, March.
    13. Luis Hernando Portillo-Riascos & Edinson Ortiz-Benavides, 2021. "The External Vulnerability of the Colombian Economy 1990-2015: A Comparative Analysis," Lecturas de Economía, Universidad de Antioquia, Departamento de Economía, issue 94, pages 11-46, Enero-Jun.
    14. Gnangnon, Sèna Kimm, 2018. "Effect of multilateral trade liberalization on foreign direct investment outflows amid structural economic vulnerability in developing countries," Research in International Business and Finance, Elsevier, vol. 45(C), pages 15-29.
    15. Kurt Motamedi, 2017. "Resilience in Dynamic Complex Environments," Proceedings of Business and Management Conferences 5607908, International Institute of Social and Economic Sciences.
    16. Gnangnon, Sèna Kimm, 2013. "Structural vulnerability and excessive public indebtedness in CFA Franc Zone countries," Economic Modelling, Elsevier, vol. 35(C), pages 816-832.
    17. Nguyen, Canh Phuc & Su, Thanh Dinh, 2021. "Easing economic vulnerability: Multidimensional evidence of financial development," The Quarterly Review of Economics and Finance, Elsevier, vol. 81(C), pages 237-252.
    18. Kurt Motamedi, 2017. "Resilience in Dynamic Complex Environments: Willful Adaptability and Copability," International Journal of Business and Management, International Institute of Social and Economic Sciences, vol. 5(2), pages 29-39, November.
    19. Gnangnon, Sèna Kimm, 2022. "Effect of structural economic vulnerability on the participation in international trade," EconStor Preprints 262004, ZBW - Leibniz Information Centre for Economics.
    20. Inayat Ullah Mangla, 2011. "Reconstructing the Performance of Pakistan’s Political Economy: Another Paradigm," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 16(Special E), pages 30-70, September.
    21. Camilleri, Silvio John & Falzon, Joseph, 2013. "The Challenges of Productivity Growth in the Small Island States of Europe: A Critical Look of Malta and Cyprus," MPRA Paper 62489, University Library of Munich, Germany.
    22. Unver, Mustafa & Dogru, Bulent, 2015. "The Determinants of Economic Fragility: Case of the Fragile Five Countries," MPRA Paper 68734, University Library of Munich, Germany, revised 2015.
    23. Sena Kimm Gnangnon, 2023. "Duration of the Membership in the GATT/WTO, Structural Economic Vulnerability and Trade Costs," JRFM, MDPI, vol. 16(6), pages 1-32, May.
    24. Portillo Riascos, Luis Hernando, 2021. "La posición cíclica de la política fiscal en Colombia durante el periodo 1990-2015," Revista Lecturas de Economía, Universidad de Antioquia, CIE, issue No. 95, pages 42-83, July.

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    More about this item

    Keywords

    Economic Vulnerability; Economic Growth; Economic Convergence; Small Economies;
    All these keywords.

    JEL classification:

    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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