Institutions and Growth Volatility*

Anbarci, N.; Hill, J.; Kirmanoglu, H.

Abstract

Recently some studies provided evidence that democratic political institutions generate less volatile growth. These studies, however, do not provide any link between democracy and investment volatility. Here, we focus on the specific channel that links individualistic societies and low growth volatility. We test whether investment volatility and consequently growth volatility are lower in individualistic societies. We construct a two‐equation system of investment and income growth volatility, allowing various measures of individualism to influence growth volatility both directly and indirectly. We find that individualism significantly directly and indirectly influences growth volatility negatively.

Citation

Anbarci, N., Hill, J., & Kirmanoglu, H. (2011). Institutions and Growth Volatility*. Economic Papers, 30(2), 233-252. https://doi.org/10.1111/j.1759-3441.2011.00114.x

• Journal Article Type: Article
• Online Publication Date: May 23, 2011
• Publication Date: 2011-06
• Deposit Date: Aug 17, 2018
• Journal: Economic Papers
• Print ISSN: 0812-0439
• Electronic ISSN: 1759-3441
• Publisher: Wiley
• Peer Reviewed: Peer Reviewed
• Volume: 30
• Issue: 2
• Pages: 233-252
• DOI: https://doi.org/10.1111/j.1759-3441.2011.00114.x
• Public URL: https://durham-repository.worktribe.com/output/1351538