What Makes Growth Sustained?
IMF Working Papers, March 1, 2008
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Bibliographic details
- Authors: Jonathan David Ostry, Andrew Berg, Jeromin Zettelmeyer
- Published: March 1, 2008
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451869217.001
Research question and methodology
- Identifies structural breaks in economic growth in 140 countries and uses these to define "growth spells": periods of high growth preceded by an upbreak and ending either with a downbreak or with the end of the sample.
- Notes regional variation: growth spells tend to be shorter in African and Latin American countries than elsewhere.
Key empirical findings
- Growth duration is positively related to:
- the degree of equality of the income distribution;
- democratic institutions;
- export orientation (with higher propensities to export manufactures, greater openness to FDI, and avoidance of exchange rate overvaluation favorable for duration);
- macroeconomic stability (with even moderate instability curtailing growth duration).
- Emphasizes that even moderate macroeconomic instability shortens growth duration.
Policy-relevant implications (inferred from findings)
- Promote more equal income distribution to lengthen growth spells.
- Strengthen democratic institutions to support sustained growth.
- Encourage export orientation, specifically:
- higher propensities to export manufactures;
- greater openness to FDI;
- avoidance of exchange rate overvaluation.
- Maintain macroeconomic stability, avoiding moderate instability that can curtail growth duration.
Subjects and keywords
- Subject: Exports, Income, Income distribution, Income inequality, Terms of trade
- Keywords: current account, developing country, exchange rate, hazard ratio, terms of trade shock, WP
Content in this bundle
- 11. Summary Regressions