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EFFECTS OF MACROECONOMIC VOLATILITY ON ECONOMIC GROWTH: EVIDENCE FROM THE EUROPEAN UNION

Year 2018, , 591 - 599, 01.06.2018
https://doi.org/10.17130/ijmeb.2018343112

Abstract

This paper investigates the relationship between macroeconomic volatility and economic growth for the period from 1995 to 2015. At the literature net economic growth effect of volatility is ambiguous. In this study, the factors which are gradually affecting the economic growth are estimated. This paper also contributes to the literature by focusing on how volatility affects economic growth and gives some policy implications. It is found that economic growth is lower in the presence of volatility at the European Union countries. This shows that smoother economic policy is crucial for the stable economic growth. Uncertainty effects economic growth negatively

References

  • Acemoglu, D., Johnson, S., Robinson, J., & Thaicharoen, Y. (2003). Institutional causes, macroeconomic symptoms: Volatility, crises and growth. Journal of Monetary Economics, 50(1), 49-123.
  • Afonso, A., & Joao T. J. (2012). Fiscal volatility, financial crises and growth. ISEG Economics Working Paper, 6, 1-9.
  • Aghion, P., & Howitt, P. (2006). Joseph Schumpeter lecture appropriate growth policy: A unifying framework. Journal of the European Economic Association, 4(2-3), 269-314.
  • Aizenman, J., & Pinto, B. (2004). Managing volatility and crises: A practitioner’s guide overview. National Bureau of Economic Research. Working Paper, 10602, 1-40.
  • Bernanke, B. S. (1983). Irreversibility, uncertainty, and cyclical investment. The Quarterly Journal of Economics, 98(1), 85-106.
  • Bloom, N., Floetotto, M., & Jaimovich, N. (2012). Really uncertain business cycles. NBER Working Paper, 18245, 1-55.
  • Dabusinskas, A., Kulikov, D., & Randveer, M. (2012). The impact of volatility on economic growth. Eesti Pank Working Paper Series, 7/2012, 1-19.
  • Dawe, D. (1996). A new look at the effects of export instability on investment and growth. World Development, 24(12), 1905-1914.
  • Friedman, M. (1968). The role of monetary policy. American Economic Review, 58, 1-17.
  • Giovanni, J., & Levchenko, A. (2006). Openness, volatility and the risk content of exports. Society for Economic Dynamics 2006, Meeting Papers, 86, 1-58.
  • Karamelikli, H., & Bayar, Y. (2016). Makroekonomik ve finansal istikrarın ekonomik büyüme üzerindeki etkisi: Türkiye örneği. International Journal of Management, Economics and Business, ICAFR 16, Special Issue, 225-236.
  • Lensink, R., Bo, H., & Sterken, E. (1999). Does uncertainty affect economic growth? An empirical analysis. Review of World Economics, 135(3), 379-396.
  • Mirman, L.J. (1971). Uncertainty and optimal consumption decisions. Econometrica, 39(1), 179-85.
  • Ramey, G., & Ramey, V.A. (1995). Cross-country evidence on the link between volatility and growth. The American Economic Review, 85(5), 1138-1151.
  • Sandmo, A. (1970). The effect of uncertainty on saving. Review of Economic Studies, 37, 312- 320.
  • Serven, L. (1997). Uncertainty, volatility, and irreversible investment: Theory, evidence, and lessons for Africa. Journal of African Economies, 6(3), 229-268.

MAKROEKONOMİK VOLATİLİTENİN EKONOMİK BÜYÜME ETKİLERİ: AVRUPA BİRLİĞİ ÖRNEĞİ

Year 2018, , 591 - 599, 01.06.2018
https://doi.org/10.17130/ijmeb.2018343112

Abstract

Bu makale, 1995 ile 2015 arasındaki dönemde makroekonomik volatilite ile ekonomik büyüme arasındaki ilişkiyi araştırmaktadır. Literatürde volatilitenin net ekonomik büyüme etkisi belirsizdir. Bu çalışmada, ekonomik büyümeyi tedrici olarak etkileyen faktörler tahmin edilmektedir. Bu makale, ayrıca volatilitenin ekonomik büyümeyi nasıl etkilediğine odaklanarak literatüre katkıda bulunur ve bazı politika çıkarımları verir. Avrupa Birliği ülkelerinde volatilitenin varlığında ekonomik büyümenin daha düşük olduğu görülmektedir. Bu, daha istikrarlı ekonomi politikasının istikrarlı ekonomik büyüme için çok önemli olduğunu göstermektedir. Belirsizlik, ekonomik büyümeyi olumsuz etkilemektedir.

References

  • Acemoglu, D., Johnson, S., Robinson, J., & Thaicharoen, Y. (2003). Institutional causes, macroeconomic symptoms: Volatility, crises and growth. Journal of Monetary Economics, 50(1), 49-123.
  • Afonso, A., & Joao T. J. (2012). Fiscal volatility, financial crises and growth. ISEG Economics Working Paper, 6, 1-9.
  • Aghion, P., & Howitt, P. (2006). Joseph Schumpeter lecture appropriate growth policy: A unifying framework. Journal of the European Economic Association, 4(2-3), 269-314.
  • Aizenman, J., & Pinto, B. (2004). Managing volatility and crises: A practitioner’s guide overview. National Bureau of Economic Research. Working Paper, 10602, 1-40.
  • Bernanke, B. S. (1983). Irreversibility, uncertainty, and cyclical investment. The Quarterly Journal of Economics, 98(1), 85-106.
  • Bloom, N., Floetotto, M., & Jaimovich, N. (2012). Really uncertain business cycles. NBER Working Paper, 18245, 1-55.
  • Dabusinskas, A., Kulikov, D., & Randveer, M. (2012). The impact of volatility on economic growth. Eesti Pank Working Paper Series, 7/2012, 1-19.
  • Dawe, D. (1996). A new look at the effects of export instability on investment and growth. World Development, 24(12), 1905-1914.
  • Friedman, M. (1968). The role of monetary policy. American Economic Review, 58, 1-17.
  • Giovanni, J., & Levchenko, A. (2006). Openness, volatility and the risk content of exports. Society for Economic Dynamics 2006, Meeting Papers, 86, 1-58.
  • Karamelikli, H., & Bayar, Y. (2016). Makroekonomik ve finansal istikrarın ekonomik büyüme üzerindeki etkisi: Türkiye örneği. International Journal of Management, Economics and Business, ICAFR 16, Special Issue, 225-236.
  • Lensink, R., Bo, H., & Sterken, E. (1999). Does uncertainty affect economic growth? An empirical analysis. Review of World Economics, 135(3), 379-396.
  • Mirman, L.J. (1971). Uncertainty and optimal consumption decisions. Econometrica, 39(1), 179-85.
  • Ramey, G., & Ramey, V.A. (1995). Cross-country evidence on the link between volatility and growth. The American Economic Review, 85(5), 1138-1151.
  • Sandmo, A. (1970). The effect of uncertainty on saving. Review of Economic Studies, 37, 312- 320.
  • Serven, L. (1997). Uncertainty, volatility, and irreversible investment: Theory, evidence, and lessons for Africa. Journal of African Economies, 6(3), 229-268.
There are 16 citations in total.

Details

Primary Language English
Journal Section Research Article
Authors

Gülçin Güreşçi This is me

Publication Date June 1, 2018
Published in Issue Year 2018

Cite

APA Güreşçi, G. (2018). EFFECTS OF MACROECONOMIC VOLATILITY ON ECONOMIC GROWTH: EVIDENCE FROM THE EUROPEAN UNION. Uluslararası Yönetim İktisat Ve İşletme Dergisi, 14(3), 591-599. https://doi.org/10.17130/ijmeb.2018343112