Testing the Validity of Political Business Cycle for the Fragile Five Countries

Cüneyt Kiliç, Feyza Balan and Unzule Kurt
Additional contact information
Cüneyt Kiliç: Canakkale Onsekiz Mart University, Turkey
Feyza Balan: Canakkale Onsekiz Mart University, Turkey
Unzule Kurt: Ardahan University, Turkey

Theoretical and Applied Economics, 2015, vol. XXII, issue 4(605), Winter, 21-32

Abstract: Using panel least squares estimation method, this study examines the links between both the business cycles-the components of political stability and the business cycles- aggregate political index (overall score) in the Fragile Five countries, namely Turkey, Indonesia, India, South Africa and Brazil for the period 1986-2013. According to the empirical findings, higher degrees of political instability are associated with lower growth rates of GDP. Moreover, the results suggest that law and order, socio-economic conditions and internal conflict have a positive impact on GDP growth rate. In other words, countries with a lower political risk related to these three indicators had greater GDP growth rate in the period 1986 to 2013. In addition, other findings suggest that high inflation and greater population growth are associated with lower GDP growth, while GDP growth rate in a previous year are positively associated with the business cycles. So, we concluded that political stability is playing an important role in shaping of the business cycles of the Fragile Five countries.

Keywords: Political Business Cycle; Cross-sectional dependence. (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://store.ectap.ro/articole/1127.pdf (application/pdf)
http://www.ectap.ro/articol.php?id=1127&rid=121 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:agr:journl:v:xxii:y:2015:i:4(605):p:21-32

Access Statistics for this article

Theoretical and Applied Economics is currently edited by Mircea Dinu

More articles in Theoretical and Applied Economics from Asociatia Generala a Economistilor din Romania / Editura Economica Contact information at EDIRC.
Bibliographic data for series maintained by Mircea Dinu ().