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What matters for growth in Europe? Institutions versus policies, quality versus instability.
- Source :
- Journal of Economic Policy Reform; Mar2015, Vol. 18 Issue 1, p69-88, 20p
- Publication Year :
- 2015
-
Abstract
- We study how the quality and instability of institutions and policies affect economic growth in 35 European countries. While stability entails valuable predictability, instability can reflect reforms that offer positive long-run consequences. We construct measures of quality and instability for a panel of countries for 1984–2009. Results suggest that the quality of policy is growth-promoting. Notably, this positive effect becomes larger the more unstable policies are. The findings suggest that for European countries, the benefits of policy flexibility – due to experimentation and learning or making rent seeking more difficult – dominate the costs of reduced predictability. [ABSTRACT FROM AUTHOR]
Details
- Language :
- English
- ISSN :
- 17487870
- Volume :
- 18
- Issue :
- 1
- Database :
- Complementary Index
- Journal :
- Journal of Economic Policy Reform
- Publication Type :
- Academic Journal
- Accession number :
- 101017983
- Full Text :
- https://doi.org/10.1080/17487870.2014.953159