Volatility and growth in developing economies: some numerical results and empirical evidence

• 成果类型: Article
• 署名作者: Turnovsky, SJ; Chattopadhyay, P
• 署名单位: University of Washington; University of Washington Seattle
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/S0022-1996(02)00016-8
• 发表日期: 2003
• 页码: 267-295
• 关键词: volatility; GROWTH; welfare; numerical analysis

摘要

This paper analyzes the effect of volatility on growth in a developing economy facing an imperfect world capital market. The analysis comprises: (i) the development of a formal framework for assessing the role of risk on growth; (ii) numerical simulation; and (iii) empirical testing of the model, using data from 61 developing economies. We find that the model plausibly replicates the equilibrium of small stylized economies subject to external and internal sources of risk. We define a benchmark economy and study the effects of various sources of risk and borrowing costs on the equilibrium growth rate, its variability, and welfare. The numerical results obtained are intuitive and supported by empirical evidence. (C) 2002 Elsevier Science B.V. All rights reserved.