Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/35364
Authors: 
Campos, Nauro F.
Karanasos, Menelaos G.
Tan, Bin
Year of Publication: 
2008
Series/Report no.: 
IZA discussion papers 3752
Abstract: 
This paper investigates the effects of financial development and political instability on economic growth in a power-ARCH framework with data for Argentina from 1896 to 2000. Our findings suggest that (i) informal or unanticipated political instability (e.g., guerrilla warfare) has a direct negative impact on growth; (ii) formal or anticipated instability (e.g., cabinet changes) has an indirect (through volatility) impact on growth; (iii) the effect of financial development is positive and, surprisingly, not via volatility; (iv) the informal instability effects are much larger in the short- than in the long-run; and (v) the impact of financial development on economic growth is negative in the short- but positive in the long-run.
Subjects: 
Economic growth
financial development
volatility
political instability
power-ARCH
JEL: 
C14
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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