Macroeconomic Policies, Instability and Growth in the World

Journal of African Economies, 7 (Supp. 2): 116-68, 1999.

48 Pages Posted: 26 Sep 2017

See all articles by Ibrahim Elbadawi

Ibrahim Elbadawi

World Bank - Economic Development Institute

Klaus Schmidt-Hebbel

Pontifical Catholic University of Chile

Date Written: December 1, 1998

Abstract

High instability and low growth characterize the macroeconomic performance of most developing countries. Inadequate policies are often to blame. This paper documents the empirical regularities that characterize the relationship between macroeconomic-financial policies, instability, and growth across developing and industrial nations. While successful transitions to low instability and high growth are not frequent, they have been observed in a dozen of countries. Such win-win transitions require to put into place institutions and rules that change government incentives in choosing between policies that reflect narrow interests or social conflict -- contributing to more instability and less growth -- and social welfare-maximizing policies that help growth and make economies more resilient to residual instability.

JEL Classification: E63, F43, O57

Suggested Citation

Elbadawi, Ibrahim and Schmidt-Hebbel, Klaus, Macroeconomic Policies, Instability and Growth in the World (December 1, 1998). Journal of African Economies, 7 (Supp. 2): 116-68, 1999. . Available at SSRN: https://ssrn.com/abstract=3042016

Ibrahim Elbadawi

World Bank - Economic Development Institute ( email )

1818 H Street
Washington, DC 20433
United States

HOME PAGE: http://econ.worldbank.org/staff/ielbadawi

Klaus Schmidt-Hebbel (Contact Author)

Pontifical Catholic University of Chile ( email )

Av. Vicuna Mackenna 4860
Santiago
Chile

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