Growth, Volatility and Political Instability: Non-Linear Time-Series Evidence for Argentina, 1896–2000

Nauro Campos and Menelaos Karanasos ()

No 3087, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: What is the relationship between economic growth and its volatility? Does political instability affect growth directly or indirectly, through volatility? This paper tries to answer such questions using a power-ARCH framework with annual time series data for Argentina from 1896 to 2000. We show that while assassinations and strikes (what we call “informal” political instability) have a direct negative effect on economic growth, “formal” political instability (constitutional and legislative changes) has an indirect (through volatility) negative impact. We also find preliminary support for the idea that while the effects of “formal” instability are stronger in the long-run, those of “informal” instability are stronger in the short-run.

Keywords: power-ARCH; political instability; volatility; economic growth (search for similar items in EconPapers)
JEL-codes: C14 D72 E23 O40 (search for similar items in EconPapers)
Pages: 11 pages
Date: 2007-10
New Economics Papers: this item is included in nep-mac and nep-pol
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

Published - published in: Economics Letters, 2008, 100 (1), 135-137

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Related works:
Journal Article: Growth, volatility and political instability: Non-linear time-series evidence for Argentina, 1896-2000 (2008)
Working Paper: Growth, Volatility and Political Instability: Non-Linear Time-Series Evidence for Argentina, 1896-2000 (2007)
Working Paper: Growth, Volatility and Political Instability: Non-Linear Time-Series Evidence for Argentina, 1896-2000 (2007)
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