The Deep Historical Roots of Macroeconomic Volatility

Research output: Journal Publications and ReviewsRGC 21 - Publication in refereed journalpeer-review

View graph of relations

Author(s)

Related Research Unit(s)

Detail(s)

Original languageEnglish
Pages (from-to)568-589
Number of pages22
Journal / PublicationEconomic Record
Volume92
Issue number299
Publication statusPublished - Dec 2016

Abstract

We present cross-country evidence that a country's macroeconomic volatility, measured either by the standard deviation of output growth or the occurrence of trend-growth breaks, is significantly affected by the country's historical variables. In particular, countries with longer histories of state-level political institutions experience less macroeconomic volatility in post-war periods. Robustness checks reveal that the effect of this historical variable on volatility remains significant and substantial after controlling for a host of structural variables investigated in previous studies. We also find that the state history variable is more important in countries with a higher level of macroeconomic volatility.

Research Area(s)

  • ECONOMIC-DEVELOPMENT, GROWTH, INSTITUTIONS, GEOGRAPHY, STATES, BIOGEOGRAPHY, DETERMINANTS, POPULATION, INEQUALITY, DEMOCRACY

Citation Format(s)

The Deep Historical Roots of Macroeconomic Volatility. / Tang, Sam Hak Kan; Leung, Charles Ka Yui.
In: Economic Record, Vol. 92, No. 299, 12.2016, p. 568-589.

Research output: Journal Publications and ReviewsRGC 21 - Publication in refereed journalpeer-review