Growth and volatility

Research output: Contribution to journalArticlepeer-review


Growth and volatility correlate negatively across countries, but positively across sectors. Analytically, whether or not sectoral growth and volatility are correlated positively is irrelevant in the aggregate. Cross-country estimates identify the detrimental effects of macroeconomic volatility on growth, but they cannot be used to dismiss theories implying a positive growth-volatility coefficient, which appear to hold in sectoral data. In particular, volatile sectors command high investment rates, as they would in a mean-variance framework.

Original languageEnglish (US)
Pages (from-to)1848-1862
Number of pages15
JournalJournal of Monetary Economics
Issue number7
StatePublished - Oct 2007


  • Growth
  • Sectors
  • Volatility

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics


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