Growth and volatility

Research output: Contribution to journalArticle


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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