Volatility and Growth

Clarendon Lectures in Economics

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ISBN:

9780198861911

Publication date:

18/11/2019

Paperback

160 pages

216.0x138.0mm

We sell our titles through other companies
Disclaimer :You will be redirected to a third party website.The sole responsibility of supplies, condition of the product, availability of stock, date of delivery, mode of payment will be as promised by the said third party only. Prices and specifications may vary from the OUP India site.

ISBN:

9780198861911

Publication date:

18/11/2019

Paperback

160 pages

216.0x138.0mm

Philippe Aghion and Abhijit Banerjee

  • An original work containing new theory and empirical analyses on the macropolicy of growth
  • Provides a new approach capable of generating relevant policy prescriptions
  • Written in an acessible style using simple models

Rights:  OUP UK (Indian Territory)

Philippe Aghion and Abhijit Banerjee

Description

It has long been recognized that productivity growth and the business cycle are closely interrelated. Yet, until recently, the two phenomena have been investigated separately in the economics literature. This book provides the first consistent attempt to analyze the effects of macroeconomic volatility on productivity growth, and also the reverse causality from growth to business cycles. The authors show that by looking at the economy through the lens of private entrepreneurs, who invest under credit constraints, one can go some way towards explaining persistent macroeconomic volatility and the effects of volatility on growth.

Beginning with an analysis of the effects of volatility on growth, the authors argue that the lower the level of financial development in a country the more detrimental the effect of volatility on growth. This prediction is confirmed by cross-country panel regressions. The data also suggests that a fixed exchange rate regime or more countercyclical budgetary policies are growth-enhancing in countries with a lower level of financial development. The former reduce aggregate volatility whereas the latter reduce the negative effects of volatility on long-term productivity-enhancing investment by firms.

The book concludes with an investigation into how the interplay between credit constraints and pecuniary externalities is sufficient to generate persistent business cycles and to explain the occurrence of currency crises.

About the Author

Philippe Aghion, Robert C. Waggoner Professor of Economics, Harvard University 

Abhijit Banerjee, Ford Foundation International Professor of Economics and Director Poverty Action Lab, MIT

Philippe Aghion and Abhijit Banerjee

Table of contents

Introduction
0: Modeling Credit Markets
1: Volatility and Growth: AK versus Schumpeterian Approach
2: Financial Development and the Effects of Growth on Volatility
3: Endogeneizing Volatility: Pecuniary Externalities and the Credit Channel
4: Endogenous Volatility in an Open Economy
5: The Third Generation Approach to Currency Crises
Conclusion

Philippe Aghion and Abhijit Banerjee

Philippe Aghion and Abhijit Banerjee

Philippe Aghion and Abhijit Banerjee

Description

It has long been recognized that productivity growth and the business cycle are closely interrelated. Yet, until recently, the two phenomena have been investigated separately in the economics literature. This book provides the first consistent attempt to analyze the effects of macroeconomic volatility on productivity growth, and also the reverse causality from growth to business cycles. The authors show that by looking at the economy through the lens of private entrepreneurs, who invest under credit constraints, one can go some way towards explaining persistent macroeconomic volatility and the effects of volatility on growth.

Beginning with an analysis of the effects of volatility on growth, the authors argue that the lower the level of financial development in a country the more detrimental the effect of volatility on growth. This prediction is confirmed by cross-country panel regressions. The data also suggests that a fixed exchange rate regime or more countercyclical budgetary policies are growth-enhancing in countries with a lower level of financial development. The former reduce aggregate volatility whereas the latter reduce the negative effects of volatility on long-term productivity-enhancing investment by firms.

The book concludes with an investigation into how the interplay between credit constraints and pecuniary externalities is sufficient to generate persistent business cycles and to explain the occurrence of currency crises.

About the Author

Philippe Aghion, Robert C. Waggoner Professor of Economics, Harvard University 

Abhijit Banerjee, Ford Foundation International Professor of Economics and Director Poverty Action Lab, MIT

Read More

Table of contents

Introduction
0: Modeling Credit Markets
1: Volatility and Growth: AK versus Schumpeterian Approach
2: Financial Development and the Effects of Growth on Volatility
3: Endogeneizing Volatility: Pecuniary Externalities and the Credit Channel
4: Endogenous Volatility in an Open Economy
5: The Third Generation Approach to Currency Crises
Conclusion

Read More