Macroeconomic Volatility and Welfare in Developing Countries
By Norman V. Loayza, Romain Rancière, L. Serven, J. Ventura. 2007
364 citations recorded by the source corpus.
Macroeconomic volatility, both a source and a reflection of underdevelopment, is a fundamental concern for developing countries. Their high aggregate instability results from a combination of large external shocks, volatile macroeconomic policies, microeconomic rigidities, and weak institutions. Volatility entails a direct welfare cost for risk-averse individuals, as well as an indirect one through its adverse effect on income growth and development. This article provides a brief overview of the recent literature on macroeconomic volatility in developing countries, highlighting its causes, consequences, and possible remedies. It then introduces the contributions of a recent conference on the subject, sponsored by the World Bank and Pompeu Fabra University, Barcelona.
Subfields: Economics and Econometrics, Finance
View Paper: https://www.semanticscholar.org/paper/c0638e4247ee46599b7d44cb4da17b793e209162
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In Economics and Econometrics
- Otaviano Canuto
- E. Vostroknutova
- Joseph A. Lipuma
- M. Brahmbhatt
- Scott L. Newbert
- Jeffrey G. Williamson
- Jonathan P. Doh
In Finance
Citations in the corpus
- The effect of institutional quality on firm export performance in emerging economies: a contingency model of firm age and size (2013, background): “Such institutional inequalities across nations are ultimately manifest in proportionately disparate levels of entrepreneurial activity (Acs and Amoros 2008) and economic growth (Acemoglu et al. 2003; Hnatkovska and Loayza 2005; Loayza et al. 2007; Ramey and Ramey 1995).”
- Dealing with Dutch Disease (2010, background): “Loayza et al. (2007) provide a recent survey. Serven (2003) documents the impact of real exchange rate volatility on investment.”
- Globalization and the Great Divergence: terms of trade booms, volatility and the poor periphery, 1782–1913 (2008, background): “Just how powerful depended on the size of 13 A contemporary estimate has it that a one-standard-deviation increase in output volatility in the Third World lowers annual GDP per capita growth by 1.28 percentage points (Loayza et al. 2007, pp. 345–6).”