Are crises good for long-term growth? The role of political institutions
Alberto Cavallo and
Eduardo Cavallo ()
Journal of Macroeconomics, 2010, vol. 32, issue 3, 838-857
This paper provides empirical evidence for the importance of institutions in determining the outcome of crises on long-term growth. We show that once unobserved country-specific effects and other sources of endogeneity are accounted for, political institutions affect growth through their interaction with crises. In particular, we find that the effect of a crisis on long-run growth is conditioned by the prevailing institutional environment. In countries with democratic institutions, the negative effect of crises is mitigated, while in countries with autocratic institutions, the negative effect is exacerbated.
Keywords: Financial; crises; Democracy; Political; institutions; Economic; growth (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (13) Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
Working Paper: Are Crises Good for Long-Term Growth?: The Role of Political Institutions (2008)
Working Paper: Are Crises Good for Long-Term Growth? The Role of Political Institutions (2008)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: http://EconPapers.repec.org/RePEc:eee:jmacro:v:32:y:2010:i:3:p:838-857
Access Statistics for this article
Journal of Macroeconomics is currently edited by Douglas McMillin and Theodore Palivos
More articles in Journal of Macroeconomics from Elsevier
Series data maintained by Dana Niculescu ().