Abstract

FERNANDEZ-TORRES, Yakira; RAMAJO-HERNANDEZ, Julián  and  DIAZ-CASERO, Juan Carlos. Institutions and volatility of economic growth: An approach to Latin America and the Caribbean. Cuad. Econ. [online]. 2019, vol.38, n.76, pp.81-108. ISSN 0121-4772.  https://doi.org/10.15446/cuad.econ.v37n76.59913.

The aim of this paper is to provide an institutional explanation for the sharp volatility of economic growth in Latin America and the Caribbean, given its persistence over time and the dramatic consequences in terms of poverty for the region. The contribution is to conduct the first analysis for 28 countries during 2002-2010, using a static model of cross section by two-stage least squares. The results support the substantial impact of institutions on reducing volatility, primarily political in nature, and provide evidence of the need for use of sampling criteria homogenization.

JEL: E02, N16, N26, O43.

Keywords : institutions; institutional quality; volatility; economic growth; Latin America and the Caribbean..

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