Political Institutions and Output Collapses
Major output collapses are costly and frequent in the developing world. Using cross-country data, we classify five-year periods using a two-dimensional state space based on growth regimes and political institutions. We then model the joint evolution of output growth and political institutions as a f...
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| Format: | eBook |
| Language: | English |
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Washington, D.C.
International Monetary Fund
2023
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| Series: | IMF Working Papers
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| Collection: | International Monetary Fund - Collection details see MPG.ReNa |
| Summary: | Major output collapses are costly and frequent in the developing world. Using cross-country data, we classify five-year periods using a two-dimensional state space based on growth regimes and political institutions. We then model the joint evolution of output growth and political institutions as a finite state Markov chain, and study how countries move between states. We find that growth is more likely to be sustained under democracy than under autocracy; output collapses are more persistent under autocracy; and stagnation under autocracy can give way to outright collapse. Democratic countries appear to be more resilient |
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| Physical Description: | 60 pages |
| ISBN: | 9798400225802 |