TY - CHAP

T1 - An empirical analysis of growth volatility: A Markov chain approach

AU - Lavezzi, Andrea Mario

AU - Fiaschi, Davide

AU - Lavezzi, Andrea Mario

PY - 2005

Y1 - 2005

N2 - This paper studies the determinants of growth rate volatility, focusing on the effect of level of GDP, structural change and the size of economy. First we provide a graphical analysis based on nonparametric techniques, then a quantitative analysis which follows the distribution dynamics approach. Growth volatility appears to (i) decrease with per capita GDP, (ii) increase with the share of the agricultural sector on GDP and, (iii) decrease with the size of the economy, measured by a combination of total GDP and trade openness. However, we show that the explanatory power of per capita GDP tends to vanish when we control for the size of the economy. © 2005 Springer-Verlag Berlin Heidelberg.

AB - This paper studies the determinants of growth rate volatility, focusing on the effect of level of GDP, structural change and the size of economy. First we provide a graphical analysis based on nonparametric techniques, then a quantitative analysis which follows the distribution dynamics approach. Growth volatility appears to (i) decrease with per capita GDP, (ii) increase with the share of the agricultural sector on GDP and, (iii) decrease with the size of the economy, measured by a combination of total GDP and trade openness. However, we show that the explanatory power of per capita GDP tends to vanish when we control for the size of the economy. © 2005 Springer-Verlag Berlin Heidelberg.

KW - Growth volatility

KW - Markov transition matrix

KW - Nonparametric methods

KW - Structural change

KW - Growth volatility

KW - Markov transition matrix

KW - Nonparametric methods

KW - Structural change

UR - http://hdl.handle.net/10447/31618

M3 - Chapter

SN - 978-3-540-24282-6

T3 - LECTURE NOTES IN ECONOMICS AND MATHEMATICAL SYSTEMS

SP - 319

EP - 334

BT - New Tools of Economic Dynamics

ER -