Publication:
Macroeconomic Policy: Does It Matter for Growth? The Role of Volatility

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dc.contributor.authorFatas, Antonio
dc.contributor.authorMihov, Ilian
dc.date.accessioned2017-08-28T19:13:30Z
dc.date.available2017-08-28T19:13:30Z
dc.date.issued2009
dc.description.abstractRecent academic research has questioned the role of economic policy as a determinant of long term growth rates. While there seems to be a correlation between several policy variables and growth rates, this correlation disappears when controlling for other factors. As an example, the significance of key economic policy variables such as inflation or government size disappears if we account for the quality of institutions. This paper looks at recent empirical research that questions the conclusion that macroeconomic policy does not matter for growth. By looking at the volatility of economic policy (whether it is fiscal policy or exchange rates), the authors find that policy is still a relevant and robust explanatory variable of cross country differences in economic growth. These results have strong policy implications. Improvements in the conduct of macroeconomic policy can have beneficial growth effects even if institutional reforms are not taking place. These results do not deny the importance of institutional reforms. By setting the right institutions one can ensure the proper conduct of macroeconomic policy without having to rely on the 'quality' of the decision maker.en
dc.identifierhttp://documents.worldbank.org/curated/en/109371468328586374/Macroeconomic-policy-does-it-matter-for-growth-The-role-of-volatility
dc.identifier.doi10.1596/28025
dc.identifier.urihttps://hdl.handle.net/10986/28025
dc.languageEnglish
dc.language.isoen_US
dc.publisherWorld Bank, Washington, DC
dc.relation.ispartofseriesCommission on Growth and Development Working Paper;No. 48
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo
dc.subjectABSOLUTE VALUE
dc.subjectAGGREGATE LEVEL
dc.subjectAMERICAN ECONOMIC REVIEW
dc.subjectAVERAGE GROWTH
dc.subjectBUDGET DEFICITS
dc.subjectBUSINESS CYCLE
dc.subjectBUSINESS CYCLES
dc.subjectCASE STUDIES
dc.subjectCENTRAL BANK
dc.subjectCENTRAL BANKS
dc.subjectCOUNTRY CASE
dc.subjectCREDIT CONSTRAINTS
dc.subjectCROSS COUNTRY
dc.subjectDATA AVAILABILITY
dc.subjectDEMOCRACY
dc.subjectDEPENDENT VARIABLE
dc.subjectDEVELOPING COUNTRIES
dc.subjectDEVELOPMENT ECONOMICS
dc.subjectDEVELOPMENT PRACTITIONERS
dc.subjectDEVELOPMENT RESEARCH
dc.subjectDISCRETIONARY FISCAL POLICY
dc.subjectECONOMETRIC ANALYSIS
dc.subjectECONOMIC ACTIVITY
dc.subjectECONOMIC DEVELOPMENT
dc.subjectECONOMIC FLUCTUATIONS
dc.subjectECONOMIC GROWTH
dc.subjectECONOMIC MANAGEMENT
dc.subjectECONOMIC PERFORMANCE
dc.subjectECONOMIC POWER
dc.subjectECONOMIC RESEARCH
dc.subjectECONOMIC STABILITY
dc.subjectECONOMIC STUDIES
dc.subjectEFFECTS OF VOLATILITY
dc.subjectEMERGING MARKET
dc.subjectEMERGING MARKET BUSINESS
dc.subjectEMERGING MARKETS
dc.subjectEMPIRICAL EVIDENCE
dc.subjectEMPIRICAL LITERATURE
dc.subjectEMPIRICAL RESULTS
dc.subjectEMPIRICAL WORK
dc.subjectENVIRONMENTAL BENEFITS
dc.subjectEXCHANGE RATE POLICY
dc.subjectEXCHANGE RATES
dc.subjectEXPLANATORY VARIABLES
dc.subjectEXPORT DIVERSIFICATION
dc.subjectEXTERNAL SHOCKS
dc.subjectFINANCIAL DEVELOPMENT
dc.subjectFISCAL POLICIES
dc.subjectFISCAL POLICY
dc.subjectFUTURE RESEARCH
dc.subjectGDP
dc.subjectGDP DEFLATOR
dc.subjectGDP PER CAPITA
dc.subjectGOVERNMENT CONSUMPTION
dc.subjectGOVERNMENT DEBT
dc.subjectGOVERNMENT SPENDING
dc.subjectGROWTH EFFECTS
dc.subjectGROWTH LITERATURE
dc.subjectGROWTH MODEL
dc.subjectGROWTH MODELS
dc.subjectGROWTH PERFORMANCE
dc.subjectGROWTH RATE
dc.subjectGROWTH RATES
dc.subjectGROWTH REGRESSIONS
dc.subjectGROWTH THEORY
dc.subjectHIGH INFLATION
dc.subjectHIGH VOLATILITY
dc.subjectHIGHER VOLATILITY
dc.subjectHUMAN CAPITAL
dc.subjectINCOME
dc.subjectINCOMPLETE MARKETS
dc.subjectINDUSTRIAL ECONOMIES
dc.subjectINDUSTRIALIZED COUNTRIES
dc.subjectINFLATION
dc.subjectINFLATION RATES
dc.subjectINSTITUTIONAL ENVIRONMENT
dc.subjectINSTRUMENTAL VARIABLES
dc.subjectINTEREST RATE
dc.subjectINTEREST RATES
dc.subjectINTERNATIONAL FINANCE
dc.subjectLABOR SUPPLY
dc.subjectLIBERALIZATION
dc.subjectLINK BETWEEN VOLATILITY
dc.subjectLIQUIDITY
dc.subjectLONG-TERM GROWTH
dc.subjectLOW-INCOME COUNTRIES
dc.subjectMACROECONOMIC MODELS
dc.subjectMACROECONOMIC OUTCOMES
dc.subjectMACROECONOMIC PERFORMANCE
dc.subjectMACROECONOMIC POLICIES
dc.subjectMACROECONOMIC POLICY
dc.subjectMACROECONOMIC STABILIZATION
dc.subjectMACROECONOMIC VOLATILITY
dc.subjectMACROECONOMICS
dc.subjectMARGINAL EFFECT
dc.subjectMEAN INCOME
dc.subjectMEASURE OF VOLATILITY
dc.subjectMONETARY ECONOMICS
dc.subjectMONETARY POLICY
dc.subjectNATURAL RATE OF UNEMPLOYMENT
dc.subjectNATURAL RESOURCES
dc.subjectNEGATIVE EFFECT
dc.subjectNEGATIVE IMPACT
dc.subjectNEOCLASSICAL MODELS
dc.subjectOUTPUT
dc.subjectOUTPUT GAP
dc.subjectOUTPUT GROWTH
dc.subjectOUTPUT PER CAPITA
dc.subjectOUTPUT VOLATILITY
dc.subjectOVERVALUATION
dc.subjectPOINT ESTIMATES
dc.subjectPOLICY CHANGE
dc.subjectPOLICY CHANGES
dc.subjectPOLICY DETERMINANTS
dc.subjectPOLICY IMPLICATIONS
dc.subjectPOLICY INSTRUMENT
dc.subjectPOLICY MAKERS
dc.subjectPOLICY POINT OF VIEW
dc.subjectPOLICY RESEARCH
dc.subjectPOLICY STANCE
dc.subjectPOLICY UNCERTAINTY
dc.subjectPOLICY VARIABLES
dc.subjectPOLITICAL BUSINESS CYCLE
dc.subjectPOLITICAL ECONOMY
dc.subjectPOLITICAL ECONOMY OF REFORM
dc.subjectPOLITICAL INSTABILITY
dc.subjectPOLITICAL POWER
dc.subjectPOLITICAL SYSTEM
dc.subjectPOOR COUNTRIES
dc.subjectPOSITIVE EFFECTS
dc.subjectPOVERTY REDUCTION
dc.subjectPRIMARY EDUCATION
dc.subjectPRIVATE INFRASTRUCTURE
dc.subjectPRIVATE INVESTMENT
dc.subjectPRODUCTION FUNCTION
dc.subjectPRODUCTIVITY GROWTH
dc.subjectPUBLIC DEBT
dc.subjectRAPID ECONOMIC GROWTH
dc.subjectREAL EXCHANGE RATE
dc.subjectREAL EXCHANGE RATES
dc.subjectRECESSIONS
dc.subjectRICH COUNTRIES
dc.subjectRISK NEUTRAL
dc.subjectRISK SHARING
dc.subjectSCALE EFFECTS
dc.subjectSIGNIFICANT EFFECT
dc.subjectSIGNIFICANT IMPACT
dc.subjectSTANDARD DEVIATION
dc.subjectSTANDARD ERRORS
dc.subjectTAX
dc.subjectTAX BASE VARIABILITY
dc.subjectTAX RATE
dc.subjectTAX RATES
dc.subjectTAXATION
dc.subjectTOTAL FACTOR PRODUCTIVITY
dc.subjectUTILITY FUNCTION
dc.subjectVOLATILE ECONOMY
dc.subjectVOLATILITY
dc.subjectVOLATILITY OF INFLATION
dc.titleMacroeconomic Policyen
dc.title.subtitleDoes It Matter for Growth? The Role of Volatilityen
dc.typeWorking Paperen
dc.typeDocument de travailfr
dc.typeDocumento de trabajoes
dspace.entity.typePublication
okr.date.disclosure2010-12-07
okr.date.doiregistration2025-04-15T12:01:22.746558Z
okr.doctypePublications & Research
okr.doctypePublications & Research::Working Paper
okr.docurlhttp://documents.worldbank.org/curated/en/109371468328586374/Macroeconomic-policy-does-it-matter-for-growth-The-role-of-volatility
okr.guid109371468328586374
okr.identifier.externaldocumentum000333038_20101207233537
okr.identifier.internaldocumentum13209846
okr.identifier.report57747
okr.importedtrue
okr.language.supporteden
okr.pdfurlhttp://documents.worldbank.org/curated/en/109371468328586374/pdf/577470NWP0Box353767B01PUBLIC10gcwp048web.pdfen
okr.topicMacroeconomics and Economic Growth::Business Cycles and Stabilization Policies
okr.topicMacroeconomics and Economic Growth::Economic Conditions and Volatility
okr.topicMacroeconomics and Economic Growth::Economic Growth
okr.topicMacroeconomics and Economic Growth::Fiscal & Monetary Policy
okr.topicMacroeconomics and Economic Growth::Macroeconomic Management
okr.unitPoverty Reduction and Equity (PRMPR)
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