EconPapers    
Economics at your fingertips  
 

What Drives Output Volatility? The Role of Demographics and Government Size Revisited

Martin Iseringhausen () and Hauke Vierke

No 75, European Economy - Discussion Papers 2015 - from Directorate General Economic and Financial Affairs (DG ECFIN), European Commission

Abstract: This paper studies the determinants of output volatility in a panel of 22 OECD countries. In contrast to the existing literature, we avoid ad hoc estimates of volatility based on rolling windows, and we account for possible non-stationarity of the data. Specifically, output volatility is estimated by means of an unobserved components model where the volatility series is the outcome of both macroeconomic determinants and a latent integrated process. A Bayesian model selection is performed to test for the presence of the nonstationary component. The results point to demographics and government size as important determinants of macroeconomic (in)stability. In particular, a larger share of prime-age workers is associated with lower output volatility, while higher public expenditure increases volatility.

JEL-codes: I00 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-mac
Date: 2018-01
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
https://ec.europa.eu/info/sites/info/files/economy-finance/dp075_en.pdf (application/pdf)

Related works:
Journal Article: What Drives Output Volatility? The Role of Demographics and Government Size Revisited (2019) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:euf:dispap:075

Access Statistics for this paper

More papers in European Economy - Discussion Papers 2015 - from Directorate General Economic and Financial Affairs (DG ECFIN), European Commission Contact information at EDIRC.
Bibliographic data for series maintained by ECFIN INFO ().

 
Page updated 2019-09-14
Handle: RePEc:euf:dispap:075