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Title:Commodity price volatility, democracy and economic growth PDF Logo
Authors:Arezki, Rabah
Gylfason, Thorvaldur
Issue Date:2011
Series/Report no.:CESifo working paper: Resource and Environment Economics 3619
Abstract:We use a new dataset on non-resource GDP to examine the impact of commodity price volatility on economic growth in a panel of up to 158 countries during the period 1970-2007. Our main finding is that commodity price volatility leads to a significant increase in non-resource GDP growth in democracies, but to no significant increase in autocracies. To explain this result, we show that increased commodity price volatility leads to a statistically significant and quantitatively large increase in net national saving in democracies. In autocracies, on the other hand, net national saving decreased significantly. Our results hold true when using indicators capturing the quality of economic institutions in lieu of indicators of political institutions.
Subjects:commodity prices
volatility
democracy
economic growth
JEL:D74
D63
F32
Q33
Document Type:Working Paper
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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