Is Economic Volatility Detrimental to Global Sustainability?

Huang, Yongfu

doi:10.1093/wber/lhr042

Publication: Is Economic Volatility Detrimental to Global Sustainability?

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Date

2012-01-18

ISSN

1564-698X

Published

2012-01-18

Author(s)

Huang, Yongfu

Abstract

In a dynamic panel data model allowing for error cross-section dependence, output volatility is found to impede sustainable development. Through a financial development channel (liquidity liability ratio), output volatility exerts a significant effect on depletion of natural resources, a key component of sustainability. Low-income countries, low energy-intensity countries, and low trade-share countries tend to be especially vulnerable to macroeconomic volatility and shocks. The findings highlight the interaction between global financial markets and the wider economy as a key factor influencing sustainable development, with important implications for macroeconomic and environmental policies in an integrated global green economy.

Citation

“Huang, Yongfu. 2012. Is Economic Volatility Detrimental to Global Sustainability?. World Bank Economic Review. © Oxford University Press on behalf of the World Bank. http://hdl.handle.net/10986/15343 License: CC BY-NC-ND 3.0 IGO.”