Proceedings of the German Development Economics Conference, Frankfurt a.M. 2009 37
Argentina is the only country in the world that was developed in 1900 and developing in 2000. Although various underlying reasons have been identified (chiefly political instability, financial development, inflation, trade openness, and international financial integration), no study has quantitatively assessed their relative importance. This paper tries to fill this gap. We use the power-ARCH framework and annual data since 1896 to study how important are these factors vis-à-vis both growth and growth volatility. Our results suggest that financial development, trade openness and political instability are the main factors, with important differences in terms of their short versus long-run behavior.
economic growth financial development volatility political instability trade openness power-GARCH