Paper #1494

Título:

Economic uncertainty and structural reforms

Autores:

Alessandra Bonfiglioli y Gino Gancia

Fecha:

Octubre 2015

Resumen:

Does economic uncertainty promote the implementation of structural reforms? We answer this question using one of the most exhaustive cross-country panel data set on reforms in six major areas and measuring economic uncertainty with stock market volatility. To address endogeneity concerns, we propose various identification strategies, instrumenting uncertainty with world shocks to volatility and with natural disasters, political coups and revolutions. Across all specifications, we find that uncertainty has a positive and significant e�ect on the adoption of reforms. This result is robust to the inclusion of a large number of controls, such as political variables, economic variables, crisis indicators, and a host of country, reform and time fixed effects.

Palabras clave:

Reforms, Uncertainty.

Códigos JEL:

E02, E60, L51

Área de investigación:

Macroeconomía y Economía Internacional

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