Economic Volatilities and Growth in Latin America: Comparative Evidence with Sub-Saharan Africa on Export Versus Capital Instability

Augustin Fosu ()

Economia Internazionale / International Economics, 2002, vol. 55, issue 1, 1-16

Abstract: Although the existing evidence appears to support the view that export instability (XI) is deleterious to economic growth in developing countries generally, it is still mixed. For instance, recent research on sub-Saharan Africa (SSA) finds that the impact of XI on GDP growth is insignificant, but that capital (investment) instability, RI, exercises a strong negative effect. The current paper assesses the evidence for Latin America (LA), based on an augmented production function. The result for LA corroborates the above evidence for SSA, suggesting that RI is the more relevant volatility variable in adversely influencing growth. Unlike the case of SSA, however, XI is non¬ extraneous in the LA growth equation, despite its statistically insignificant coefficient.

JEL-codes: O40 (search for similar items in EconPapers)
Date: 2002
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Persistent link: https://EconPapers.repec.org/RePEc:ris:ecoint:0193

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