Person:
Brueckner, Markus
Author Name Variants
Fields of Specialization
Macroeconomics
Degrees
Externally Hosted Work
Contact Information
Last updated
January 31, 2023
Biography
Markus Brueckner is Professor in the Research School of Economics of the Australian National University. He is an Australian Research Council Future Fellow. At RSE he heads the Economics Program of the Institute of Advanced Studies. His main research interests are economic growth and political economy. He has published widely in leading international journals and regularly acts as a referee in the peer review process of these journals. His research has been featured in Bloomberg, Financial Times, New York Times, Wall Street Journal, and the Economist.
Publication Search Results
1 - 10 of 11
-
Publication
Resource Windfalls and Emerging Market Sovereign Bond Spreads : The Role of Political Institutions
(World Bank, 2012-01-18)We examine the effect that revenue windfalls from international commodity price booms have on sovereign bond spreads using panel data for 38 emerging market economies during the period 1997-2007. Our main finding is that commodity price booms lead to a significant reduction in the sovereign bond spread in democracies, but to a significant increase in the spread in autocracies. To explain our finding we show that, consistent with the political economy literature on the resource curse, revenue windfalls from international commodity price booms significantly increased real per capita GDP growth in democracies, while in autocracies GDP per capita growth decreased. -
Publication
Distortions to Agriculture and Economic Growth in Sub-Saharan Africa
(World Bank, Washington, DC, 2012-09)To what extent has Sub-Saharan Africa's slow economic growth over the past five decades been due to price and trade policies that discouraged production of agricultural relative to non-agricultural tradables? This paper uses a new set of estimates of policy induced distortions to relative agricultural prices to address this question econometrically. First, the authors test if these policy distortions respond to economic growth, using rainfall and international commodity price shocks as instrumental variables. They find that on impact there is no significant response of relative agricultural price distortions to changes in real GDP per capita growth. Then, the authors test the reverse proposition and find a statistically significant and sizable negative effect of relative agricultural price distortions on the growth rate of Sub-Saharan African countries. The fixed effects estimates yield that, during the 1960-2005 period, a ten percentage points increase in distortions to relative agricultural prices decreased the region's real GDP per capita growth rate by about half a percentage point per annum. -
Publication
Trade Causes Growth in Sub-Saharan Africa
(World Bank, Washington, DC, 2012-03)In the 1990s the mainstream consensus was that trade causes growth. Subsequent research shed doubt on the consensus view, as evidence suggested that the identification of the effect of trade on growth was problematic in the existing literature. This paper contributes to this debate by focusing on growth in Sub-Saharan Africa. It estimates the effect of openness to international trade on economic growth with panel data. Employing instrumental variables techniques that correct for endogeneity bias, the empirical evidence suggests that within-country variations in trade openness cause economic growth: a 1 percentage point increase in the ratio of trade over gross domestic product is associated with a short-run increase in growth of approximately 0.5 percent per year; the long-run effect is larger, reaching about 0.8 percent after ten years. These results are robust to controlling for country and time fixed effects as well as political institutions. -
Publication
Effects of Income Inequality on Aggregate Output
(World Bank, Washington, DC, 2015-06)This paper estimates the effect of income inequality on real gross domestic product per capita using a panel of 104 countries during the period 1970–2010. The empirical analysis addresses endogeneity issues by using instrumental variables estimation and controlling for country and time fixed effects. The analysis finds that, on average, income inequality has a significant negative effect on transitional gross domestic product per capita growth and the long-run level of gross domestic product per capita. However, the impact varies by the level of economic development, so much so that in poor countries income inequality has a significant positive effect on gross domestic product per capita. -
Publication
Benchmarking the Determinants of Economic Growth in Latin America and the Caribbean
(World Bank, Washington, DC, 2014-12)The Latin America and Caribbean (LAC) region has seen a decade of remarkable growth and income convergence. Growth has been a key driver for reducing poverty and boosting shared prosperity. It has been debated how much of this decade of growth has been driven by policy reforms and how much was due to the favorable external conditions. While external factors were supportive and relevant, the effect of domestic policies was just as relevant for explaining LAC's recent growth performance. The emphasis of domestic policy has shifted from stabilization policies to structural policies. In addition, a benchmarking exercise reveals which policy gaps will lead to the highest potential growth-payoffs for each country and helps identify potential trade-offs. The authors analyze growth in LAC using descriptive statistics and growth econometrics. The authors use these results for explaining the pattern of growth in LAC over the last decade, for looking ahead, and to identify potential policy gaps. -
Publication
Beyond Commodities: The Growth Challenge of Latin America and the Caribbean
(World Bank, Washington, DC, 2014-12-01)The Latin America and Caribbean (LAC) region has seen a decade of remarkable growth and income convergence. Growth has been a key driver for reducing poverty and boosting shared prosperity. It has been debated how much of this decade of growth has been driven by policy reforms and how much was due to the favorable external conditions. While external factors were supportive and relevant, the effect of domestic policies was just as relevant for explaining LAC's recent growth performance. The emphasis of domestic policy has shifted from stabilization policies to structural policies. In addition, a benchmarking exercise reveals which policy gaps will lead to the highest potential growth-payoffs for each country and helps identify potential trade-offs. The authors analyze growth in LAC using descriptive statistics and growth econometrics. The authors use these results for explaining the pattern of growth in LAC over the last decade, for looking ahead, and to identify potential policy gaps. -
Publication
The Effects of Volatility, Fiscal Policy Cyclicality and Financial Development on Growth: Evidence for the Eastern Caribbean
(World Bank, Washington, DC, 2015-12)This paper presents estimates of the effects that terms of trade volatility has on growth of real gross domestic product per capita. Based on five-year non-overlapping panel data comprising 175 countries during 1980–2010, the paper finds that: (i) in model specifications that do not include country fixed effects, terms of trade volatility has a significant negative average effect on economic growth; (ii) once country fixed effects are included in the model, the average effect of terms of trade volatility on economic growth is not significantly different from zero; (iii) robust to the inclusion of country fixed effects, terms of trade volatility has significantly adverse effects on economic growth in countries with pro-cyclical fiscal policy; and (iv) in model specifications that do not include country fixed effects, financial development is a significant mediating factor with regard to the effect that terms of trade volatility has on economic growth, however, the significance of this effect vanishes once country fixed effects are included in the model. The paper also explores these relationships for the Organization of Eastern Caribbean States region. A key conclusion from the research is that countercyclical fiscal policy and deeper financial markets will have particularly high payoffs in reducing the adverse growth effects of terms of trade volatility in the Organization of Eastern Caribbean States region. -
Publication
The Rise of the Middle Class and Economic Growth in ASEAN
(Elsevier, 2018-01-05)We present instrumental variables estimates of the relationship between the share of income accruing to the middle class and GDP per capita. The increase in GDP per capita that ASEAN economies experienced during 1970–2010 significantly contributed to a higher share of income accruing to the middle class in these countries. Econometric model estimates show that the impact of a rise of the middle class on economic growth depends on initial levels of GDP per capita. In the majority of ASEAN countries, a rise of the middle class that is unrelated to GDP per capita growth would have had a significant negative effect on economic growth for levels of ASEAN economies' GDP per capita in 1970. In contrast, for recent values of GDP per capita a rise of the middle class would positively contribute to growth of GDP per capita in ASEAN. We show that investment is an important channel through which the income share of the middle class affects economic growth. -
Publication
The Rise of the Middle Class and Economic Growth in ASEAN
(World Bank, Washington, DC, 2017-05)This paper presents estimates of the relationship between the share of income accruing to the middle class and gross domestic product per capita of economies from the Association of Southeast Asian Nations. The increase in gross domestic product per capita that these economies experienced during 1970–2010 significantly contributed to a higher share of income accruing to the middle class. The impact of the rise of the middle class on economic growth depends on the countries' initial level of gross domestic product per capita. In the majority of these countries, a rise of the middle class that is unrelated to gross domestic product per capita growth would have had a significant negative effect on economic growth, based on the values of the countries' gross domestic product per capita in 1970. In contrast, for recent values of gross domestic product per capita, a rise of the middle class would positively contribute to growth in gross domestic product per capita. The paper shows that human capital accumulation is an important channel through which a rise of the middle class affects economic growth. -
Publication
Inequality and Economic Growth: The Role of Initial Income
(World Bank, Washington, DC, 2018-06)This paper estimates a panel model in which the relationship between inequality and gross domestic product per capita growth depends on countries' initial incomes. Estimates of the model show that the relationship between inequality and gross domestic product per capita growth is significantly decreasing in countries' initial incomes. The results from instrumental variables regressions show that in low-income countries, transitional growth is boosted by greater income inequality. In high-income countries, inequality has a significant negative effect on transitional growth. For the median country in the world that in 2015 had a purchasing power parity gross domestic product per capita of around US$10,000, instrumental variables estimates predict that a 1 percentage point increase in the Gini coefficient decreases gross domestic product per capita growth over a five-year period by over 1 percentage point; the long-run effect on the level of gross domestic product per capita is around -5 percent.