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Is growth exogenous? Evidence from the 1970s and 1980s

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  • Alessandro Rebucci

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.

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  • Alessandro Rebucci, 2010. "Is growth exogenous? Evidence from the 1970s and 1980s," Applied Economics, Taylor & Francis Journals, vol. 42(5), pages 535-543.
    • Handle: RePEc:taf:applec:v:42:y:2010:i:5:p:535-543
    DOI: 10.1080/00036840701704410
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    References listed on IDEAS

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    1. Dornbusch, Rudiger, 1990. "Policies to Move from Stabilization to Growth," CEPR Discussion Papers 456, C.E.P.R. Discussion Papers.
    2. Rudiger Dornbusch, 1990. "From Stabilization to Growth," NBER Working Papers 3302, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Canova, Fabio & Ciccarelli, Matteo, 2013. "Panel vector autoregressive models: a survey," Working Paper Series 1507, European Central Bank.
    2. Choi, Woon Gyu & Kang, Taesu & Kim, Geun-Young & Lee, Byongju, 2017. "Global liquidity transmission to emerging market economies, and their policy responses," Journal of International Economics, Elsevier, vol. 109(C), pages 153-166.
    3. Matteo Ciccarelli & Fulvia Marotta, 2021. "Demand or Supply? An empirical exploration of the effects of climate change on the macroeconomy," Working Papers 933, Queen Mary University of London, School of Economics and Finance.
    4. Rebucci, Alessandro, 2010. "Estimating VARs with long stationary heterogeneous panels: A comparison of the fixed effect and the mean group estimators," Economic Modelling, Elsevier, vol. 27(5), pages 1183-1198, September.
    5. Ashima Goyal & Rajeswari Sengupta & Akhilesh Verma, 2019. "External debt financing and macroeconomic instability in emerging market economies," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2019-013, Indira Gandhi Institute of Development Research, Mumbai, India.
    6. Swamy, Vighneswara, 2020. "Macroeconomic transmission of Eurozone shocks to India—A mean-adjusted Bayesian VAR approach," Economic Analysis and Policy, Elsevier, vol. 68(C), pages 126-150.
    7. Ciccarelli, Matteo & Marotta, Fulvia, 2024. "Demand or Supply? An empirical exploration of the effects of climate change on the macroeconomy," Energy Economics, Elsevier, vol. 129(C).

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