The Asymmetric Impact of Growth Fluctuation on Human Development: Evidence from Correlates of Growth Decelerations and Accelerations

Abstract

This paper studies the impact of growth fluctuation on human development indicators using country level panel data between 1980 and 2006. The evidence from mean comparison and regression analysis suggests that, globally and on average, periods of decelerating economic growth are correlated with worse indicators of health and education outcomes and that the reverse happens for periods of growth accelerations. However, in line with the findings from the literature, these effects are asymmetric: things do not improve as much during good times as they worsen during bad times. And the negative effects of growth collapses are severe for developing countries, especially for Least Developed Countries (LDCs), along with little or no improvement during good times.

Keywords: Human development, Growth acceleration and deceleration, Developing countries

JEL Classification: O11, O15, O47