The deep historical roots of macroeconomic volatility

Charles Leung and Sam Hak Kan Tang

No 271, Globalization Institute Working Papers from Federal Reserve Bank of Dallas

Abstract: We present cross-country evidence that a country?s macroeconomic volatility, measured either by the standard deviation of output growth or the occurrence of trend-growth breaks, is significantly affected by the country?s historical variables. In particular, countries with longer histories of state-level political institutions experience less macroeconomic volatility in post-war periods. Robustness checks reveal that the effect of this historical variable on volatility remains significant and substantial after controlling for a host of structural variables investigated in previous studies. We also find that the state history variable is more important in countries with a higher level of macroeconomic volatility.

Pages: 44 pages
Date: 2016-04-19
New Economics Papers: this item is included in nep-gro, nep-his and nep-mac
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: The Deep Historical Roots of Macroeconomic Volatility (2016)
Working Paper: The Deep Historical Roots of Macroeconomic Volatility (2016)
Working Paper: The Deep Historical Roots of Macroeconomic Volatility (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:fip:feddgw:271

DOI: 10.24149/gwp271

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