Total factor productivity and macroeconomic instability |
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| Authors: | Hakan Berument N Nergiz Dincer Zafer Mustafaoglu |
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| Institution: | 1. Department of Economics , Bilkent University , Ankara, Turkey berument@bilkent.edu.tr;3. Economic Modeling Department , State Planning Organization , Ankara, Turkey;4. The World Bank , Washington, DC, USA |
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| Abstract: | Total factor productivity (TFP) is an important component of growth for most countries. This article assesses the role of macroeconomic instability on TFP growth. We consider volatility in inflation, openness of an economy and financial market deepness as measures of macroeconomic instability. Empirical evidence provided from Turkey suggests that volatility of openness and financial market deepness reduce TFP growth, whereas volatility of inflation increases TFP growth. |
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| Keywords: | macroeconomic instability TFP growth VAR-GARCH models |
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