Macroeconomic policy and the distribution of growth rates

Vatcharin Sirimaneetham and Jonathan Temple

Bristol Economics Discussion Papers from School of Economics, University of Bristol, UK

Abstract: We examine the view that high-quality macroeconomic policy is a necessary, but not sufficient, condition for economic growth. We first construct a new index of the quality of macroeconomic policy. We then directly compare growth rate distributions across countries with good and bad policies; use Bayesian methods to examine the partial correlation between policy and growth; and outline how growth and steady-state income levels might have differed, had all countries achieved good policy outcomes. One finding is that bad macroeconomic policies can be offset by other factors, but the fastest-growing countries in our sample all shared high-quality macroeconomic management.

Keywords: macroeconomic policy; economic growth; Washington Consensus; Bayesian Model Averaging; counterfactuals (search for similar items in EconPapers)
JEL-codes: O23 O40 (search for similar items in EconPapers)
Pages: 51 pages
Date: 2006-03
New Economics Papers: this item is included in nep-cba and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17)

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Related works:
Working Paper: Macroeconomic Policy and the Distribution of Growth Rates (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:bri:uobdis:06/584

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