A spatial econometric analysis of the regional growth and volatility in Europe

Falk, Martin; Sinabell, Franz

doi:10.1007/s10663-008-9078-z

Cited by 14 publications

(26 citation statements)

References 28 publications

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“…The paper distinguishes itself from the earlier studies by Martin & Rogers (2000) and Falk & Sinabell (2009) mentioned above in three major aspects.…”

Section: Introductionmentioning

confidence: 80%

“…Martin & Rogers (2000) identify a negative relationship between volatility and growth in a sample of 90 NUTS-1 and NUTS-2 regions during the period 1979-1992. 2 This finding contrasts with the positive correlation observed by Falk & Sinabell (2009) in 1,084 NUTS-3 regions between 1995 The limited number of analysis on the volatility-growth connection in the European setting is especially remarkable in view of the abundant theoretical arguments supporting the existence of a link between short-term economic instability and economic performance (Ramey & Ramey, 1995;Aghion & SaintPaul, 1998). Moreover, the issue poses potentially important implications for the design of policy (Norrbin & Pinar Yigit, 2005).…”

Section: Introductionmentioning

confidence: 93%

“…Third, unlike this paper, Martin & Rogers (2000) and Falk & Sinabell (2009) do not add the investment level as a control variable when estimating the relationship between volatility and economic growth in the European regions. This omission may affect their findings, since there are numerous theoretical arguments that suggest the relevance of investment in this context (e.g.…”

Section: Introductionmentioning

confidence: 95%

“…1 Nevertheless, the study of the possible relationship between volatility and regional growth has received hardly any attention in this context. Indeed, to the best of our knowledge, only Martin & Rogers (2000) and Falk & Sinabell (2009) have examined this issue in a sample of European regions using aggregate data for the economy as a whole. Martin & Rogers (2000) identify a negative relationship between volatility and growth in a sample of 90 NUTS-1 and NUTS-2 regions during the period 1979-1992.…”

Section: Introductionmentioning

confidence: 99%

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Volatility and Regional Growth in Europe: Does Space Matter?

Ezcurra

Ríos²

2015

Spatial Economic Analysis

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This paper examines the relationship between output volatility and regional growth in Europe. To that end, we present a spatially augmented stochastic growth model with technological interdependence among economies. Spatial externalities are used to model technological interdependence, which ultimately implies that the economic growth rate of a particular region is affected not only by its own degree of volatility but also by the output fluctuations experienced by the remaining regions. In order to investigate the empirical validity of this result, we examine the link between volatility and economic growth in a sample of 272 European regions over the period 1991-2011 using spatial econometric techniques. Our estimates show the existence of a negative and statistically significant relationship between volatility and economic performance in the European regions. This is partly due to the role played by spatial spillovers induced by volatility in neighbouring regions. The observed relationship is robust to the inclusion in the analysis of different explanatory variables that may affect both regional growth and business cycle fluctuations. We also check that our results do not depend on the measure or volatility used in the analysis or the econometric specification employed to capture the nature of spatial spillovers.Volatilité et expansion régionale en Europe: l'espace est-il important?RÉSUMÉ la présente communication se penche sur les rapports entre la volatilité de la production et l'expansion régionale en Europe. À cette fin, nous présentons un modèle d'expansion stochastique accrue sur le plan spatial, présentant une interdépendance technologique entre les économies. On fait usage d'externalités spatiales pour modéliser l'interdépendance technologique, ce qui implique au bout du compte que le taux d'expansion économique d'une région est affecté non seulement par son propre degré de volatilité, mais aussi par les fluctuations de production relevée dans les autres régions. Afin d'examiner la validité empirique de ce résultat, nous examinons le lien entre la volatilité et l'expansion économique dans un échantillon de 272 régions d'Europe au cours de la période 1991-2011.Volatilidad en el crecimiento regional en Europa: ¿El espacios importante?RESUMEN este estudio analiza la relación entre la volatilidad de la producción y el crecimiento regional en Europa. Con este propósito, presentamos un modelo de crecimiento estocástico ampliado de manera espacial con la interdependencia tecnológica entre las economías. Las externalidades espaciales se usan para modelar la interdependencia tecnológica, lo que en última instancia implica que la tasa de crecimiento de una región particular se ve afectada no solamente por su propio grado de volatilidad, sino también por las fluctuaciones de la producción que experimentan las regiones vecinas. Con el fin de investigar la validez empírica de este resultado, examinamos la relación entre la volatilidad y el crecimiento económico en una muestra de 272 regiones europeas durante el perio...

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“…The paper distinguishes itself from the earlier studies by Martin & Rogers (2000) and Falk & Sinabell (2009) mentioned above in three major aspects.…”

Section: Introductionmentioning

confidence: 80%

Section: Introductionmentioning

confidence: 93%

Section: Introductionmentioning

confidence: 95%

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Volatility and Regional Growth in Europe: Does Space Matter?

Ezcurra

Ríos²

2015

Spatial Economic Analysis

View full text Add to dashboard Cite

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“…They document that major macroeconomic variables including inflation, output gap and interest rate are interrelated across countries and a shock that occurs in a particular country transmits to nearby countries. In another direction of the literature, Falk & Sinabell (2008) apply tools of spatial econometrics in European regions over the period 1995-2004 and find that spatial interdependence significantly affects the conventional relationship between volatility and growth. However, cross-country analysis on the link between volatility and growth from a spatial perspective is overlooked in the literature.…”

Section: Introductionmentioning

confidence: 99%

On the Link between Volatility and Growth: A Spatial Econometrics Approach

Abate¹

2015

Spatial Economic Analysis

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This paper examines the link between macro volatility and economic growth in the lens of spatial econometrics. We present an unconstrained spatial Durbin Ramey-Ramey model. We test the extended model in a panel of 78 countries to investigate all the possible dimensions along which spatial interactions can affect the link between macro volatility and growth. In contrast to previous literature, we split the effects of volatility on growth into direct and indirect effects using partial derivative impacts approach. We found that both the direct and indirect effects of volatility on growth are negative; the latter effect suggesting the transmission of volatility shocks to neighbouring countries. Growth rates observed in neighbouring countries has a positive effect on growth rate of a particular country.Du lien entre volatilité et croissance: une méthode d'économétrie spatiale RÉSUMÉ la présente communication examine le lien entre la macro-volatilité et la croissance économique dans l'optique de l'économétrie spatiale. Nous présentons un modèle spatial sans contrainte de Durbin Ramey-Ramey. Nous soumettons le modèle élargi à un groupe de 78 pays pour examiner toutes les dimensions possibles conjointement avec des interactions spatiales pouvant affecter le lien entre la macrovolatilité et la croissance. Contrairement à des recherches précédentes, nous subdivisons les effets de la volatilité sur la croissance entre effets directs et indirects, en adoptant une méthode d'impacts à dérivée partielle. Nous relevons que les effets tant directs qu'indirects de la volatilité sur la croissance sont négatifs, dans le deuxième cas, l'effet pouvant indiquer une transmission de chocs de volatilité à des pays avoisinants. Les taux de croissance observés dans des pays voisins a un effet positif sur le taux de croissance d'un certain pays.Sobre la interrelación entre la volatilidad y el crecimiento: un enfoque econométrico espacial RESUMEN este estudio analiza la interrelación entre la macrovolatilidad y el crecimiento económico bajo una perspectiva econométrica espacial. Presentamos un modelo espacial no limitado de Durbin Ramey-Ramey. Probamos el modelo ampliado en un panel de 78 países para investigar todas las dimensiones posibles junto con las interacciones espaciales que pueden afectar la interrelación entre la macrovolatilidad y el crecimiento. En contraste con los estudios anteriores, dividimos los efectos de la volatilidad sobre el crecimiento en efectos directos e indirectos utilizando el enfoque de los efectos derivados parciales. Hemos encontrado que los efectos directos e indirectos de la volatilidad sobre el crecimiento son negativos y en el caso de los indirectos, se sugiere que la transmisión de la volatilidad afecta a los países vecinos. Las tasas de crecimiento observadas en los países vecinos tienen un efecto sobre la tasa de crecimiento de un país en particular. 波动性与增长的关联：一个空间计量经济学方法摘要：本文从计量经济学的视角审视了宏观波动性与经济增长之间的关联。我们提出了一个无约束空间 Durbin Ramey-Ramey 模型。我们在 78 个国家进行了这项扩展模型试验，以调查所有可能对宏观波动性与增长之间的关联产生影响的空间交互作用维度。与以往的文...

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