Huang, Yongfu2013-08-262013-08-262012-01-18World Bank Economic Review1564-698Xdoi:10.1093/wber/lhr042https://hdl.handle.net/10986/15343In 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.en-USCC BY-NC-ND 3.0 IGOeconomic downturnEconomic Volatilityfinancial crisisfinancial developmentfuture growthglobal financial marketsgrowth rateincomeinternational tradeliquidityLow-income countriesnatural resourcenatural resourcesoutputprivate capitalprivate capital flowssavingsstock marketssustainable developmentworld economyJournal ArticleWorld Bank10.1596/15343