Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/34377
Authors: 
Campos, Nauro F.
Karanasos, Menelaos G.
Year of Publication: 
2007
Series/Report no.: 
IZA Discussion Papers 3087
Abstract: 
What is the relationship between economic growth and its volatility? Does political instability affect growth directly or indirectly, through volatility? This paper tries to answer such questions using a power-ARCH framework with annual time series data for Argentina from 1896 to 2000. We show that while assassinations and strikes (what we call informal political instability) have a direct negative effect on economic growth, formal political instability (constitutional and legislative changes) has an indirect (through volatility) negative impact. We also find preliminary support for the idea that while the effects of formal instability are stronger in the long-run, those of informal instability are stronger in the short-run.
Subjects: 
Economic growth
volatility
political instability
power-ARCH
Document Type: 
Working Paper

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