Terms of Trade Volatility, Government Spending Cyclicality, and Economic Growth

Markus Brueckner and Francisco Carneiro
Authors registered in the RePEc Author Service: Markus Brueckner

ANU Working Papers in Economics and Econometrics from Australian National University, College of Business and Economics, School of Economics

Abstract: This paper presents estimates of the effects that terms of trade volatility has on real GDP per capita growth. Based on 5-year non-overlapping panel data comprising 175 countries during 1980-2010, the paper finds that terms of trade volatility has significant adverse effects on economic growth in countries with procyclical government spending; in countries where government spending is countercyclical terms of trade volatility has no significant effect on growth. Conditional on the mediating role of government spending cyclicality, the GDP share of domestic credit to the private sector has no significant effect on the relationship between growth and terms of trade volatility.

Date: 2016-06
New Economics Papers: this item is included in nep-gro and nep-mac
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Terms of trade volatility, government spending cyclicality, and economic growth (2017)
Working Paper: Terms of trade volatility, government spending cyclicality, and economic growth (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:acb:cbeeco:2016-638

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