Work

Good Policy or Good Luck? Country Growth Performance and Temporary Shocks

Year: 1993

Type: report

Abstract: Much of the new growth literature stresses countly characteristics, such as education levels or political stability, as the dominant determinant of growth.However, growth rates are highly unstable over time, with a correlation across decades of .1 to .3, while country characteristics are stable, with cross-decade correlations of .6 to .9. Shocks, especially those to terms of trade, play a large role in explaining variance in growth.These findings suggest either that shocks are important relative to country characteristics in determining long-run growth, or that worldwide technological change determines long-run growth while country characteristics determine relative income levels.

Source: National Bureau of Economic Research

DOI: 10.3386/w4474

Authors: William Easterly, Michael Kremer, Lant Pritchett, Lawrence Summers

Institutions: United States Department of the Treasury, National Bureau of Economic Research, World Bank, Massachusetts Institute of Technology

Language: English

Topic: Economic Growth and Productivity

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: green

OpenAlex ID: W1605609733

Cites: 37

Cited by: 686

Related to: 10