Cross-Country Evidence on the Link between Volatility and Growth

28 Pages Posted: 4 Aug 2000 Last revised: 22 Jul 2022

See all articles by Garey Ramey

Garey Ramey

University of California, San Diego (UCSD) - Department of Economics

Valerie A. Ramey

University of California at San Diego; National Bureau of Economic Research (NBER)

Date Written: December 1994

Abstract

This paper presents empirical evidence against the standard dichotomy in macroeconomics that separates growth from the volatility of economic fluctuations. In a sample of 92 countries as well as a sample of OECD countries, we find that countries with higher volatility have lower growth. The addition of standard control variables strengthens the negative relationship. We also find that government spending-induced volatility is negatively associated with growth even after controlling for both time- and country-fixed effects.

Suggested Citation

Ramey, Garey and Ramey, Valerie A., Cross-Country Evidence on the Link between Volatility and Growth (December 1994). NBER Working Paper No. w4959, Available at SSRN: https://ssrn.com/abstract=226558

Garey Ramey (Contact Author)

University of California, San Diego (UCSD) - Department of Economics ( email )

9500 Gilman Drive
La Jolla, CA 92093-0508
United States
858-534-5721 (Phone)
858-534-7040 (Fax)

Valerie A. Ramey

University of California at San Diego ( email )

9500 Gilman Drive
La Jolla, CA 92093-0508
United States
858-534-2388 (Phone)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
116
Abstract Views
1,903
Rank
430,562
PlumX Metrics