WHO IS AFRAID OF POLITICAL INSTABILITY?

Nauro F. Campos () and Jeffrey B. Nugent
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Jeffrey B. Nugent: University of Southern California

Development and Comp Systems from EconWPA

Abstract: An unstable macroeconomic environment is often regarded as detrimental to economic growth. Among the sources contributing to such instability, much of the blame has been assigned to political issues. This paper empirically tests for a causal and negative long-run relationship between political instability and economic growth but finds no such relationship. Sensitivity analysis, however, indicates that there is indeed a short-run negative relationship and, that in the long-run and ignoring institutional factors, the group of African countries is the driving force. In other words, we suspect that excluding the African countries from their samples, results of a negative relation between SPI and growth would founder.

Keywords: Economic growth; Political instability; Granger causality (search for similar items in EconPapers)
JEL-codes: O40 E23 D72 (search for similar items in EconPapers)
Date: 2001-02-23
Note: Type of Document - Acrobat PDF; pages: 20 ; figures: included
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http://129.3.20.41/eps/dev/papers/0012/0012016.pdf (application/pdf)

Related works:
Working Paper: Who is Afraid of Political Instability? (2000)
Working Paper: Who is Afraid of Political Instability? (2000)
Journal Article: Who is afraid of political instability? (2002)
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Persistent link: http://EconPapers.repec.org/RePEc:wpa:wuwpdc:0012016

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