Institutions, human capital, and economic Output volatility: A Case of Open Economies

Hira Mujahid and Shaista Alam
Authors registered in the RePEc Author Service: Dr.Hira Mujajhid

MPRA Paper from University Library of Munich, Germany

Abstract: Nowadays, it is debated why some countries are facing great macroeconomic volatility and crises. The basic reasons for dreadful macroeconomic performance and volatility are due to poor quality of institutions and unnecessary government spending, high inflation, and mismanaged exchange rates. This study investigates the relationship between institutional quality, human capital, and volatility of economic output; and uses various indicators of institutional quality. The sample includes a panel of 140 open economies, subject to the availability of data covering the annual time period from 2002 to 2014. The results propose that greater institutional quality increases economic performance and reduces the output volatility in the economy.

Keywords: Macroeconomic Volatility; Economic Performance; Quality of Institutions. (search for similar items in EconPapers)
JEL-codes: B25 C33 E60 F10 (search for similar items in EconPapers)
Date: 2016, Revised 2018
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:113235

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