Effects of Growth Volatility on Economic Performance: Empirical Evidence from Turkey

Hakan Berument (), Nazire Nergiz Dincer and Zafer Mustafaoglu

No 528, Working Papers from Economic Research Forum

Abstract: This paper examines the relationship between growth and growth volatility for a small open economy with high growth volatility: Turkey. Quarterly data for the period from 1987Q1 to 2007Q3 suggests that growth volatility reduces growth and that this result is robust under different specifications. This paper contributes to the literature by focusing on how growth volatility affects a set of variables that are crucial for growth. Empirical evidence from Turkey suggests that higher growth volatility reduces total factor productivity, investment, and the foreign currency value of local currency (depreciation). Moreover, employment increases, however the evidence for this is not statistically significant.

Pages: 15
Date: 2010-01-06, Revised 2010-01-06
New Economics Papers: this item is included in nep-ara, nep-cwa and nep-fdg
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Journal Article: Effects of growth volatility on economic performance – Empirical evidence from Turkey (2012)
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