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Growth and Volatility

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  • Jean Imbs

    (Universtity of Geneva)

Abstract

Growth and volatility correlate negatively across countries, but positively across sectors. Analytically, whether or not sectoral growth and volatility are correlated positively is irrelevant in the aggregate. Cross-country estimates identify the detrimental e¤ects of macroeconomic volatility on growth, but they cannot be used to dismiss theories implying a positive growth-volatility coefficient, which appear to hold in sectoral data. In particular, volatile sectors command high investment rates, as they would in a mean-variance framework.

Suggested Citation

  • Jean Imbs, 2006. "Growth and Volatility," Swiss Finance Institute Research Paper Series 06-09, Swiss Finance Institute.
    • Handle: RePEc:chf:rpseri:rp0609
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    More about this item

    Keywords

    Sectors; Growth; Volatility;
    All these keywords.

    JEL classification:

    • 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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