Skip to Main Content
HBS Home
  • About
  • Academic Programs
  • Alumni
  • Faculty & Research
  • Baker Library
  • Giving
  • Harvard Business Review
  • Initiatives
  • News
  • Recruit
  • Map / Directions
Faculty & Research
  • Faculty
  • Research
  • Featured Topics
  • Academic Units
  • …→
  • Harvard Business School→
  • Faculty & Research→
Publications
Publications
  • Article
  • Journal of Macroeconomics

Are Crises Good for Long-term Growth? The Role of Political Institutions

By: Alberto Cavallo and Eduardo Cavallo
  • Format:Print
ShareBar

Abstract

This paper provides empirical evidence for the importance of institutions in determining the outcome of crises on long-term growth. We show that once unobserved country-specific effects and other sources of endogeneity are accounted for, political institutions affect growth through their interaction with crises. In particular, we find that the effect of a crisis on long-run growth is conditioned by the prevailing institutional environment. In countries with democratic institutions, the negative effect of crises is mitigated, while in countries with autocratic institutions, the negative effect is exacerbated.

Keywords

Growth; Democracy; Macroeconomics; Growth and Development; Financial Crisis; Economic Growth; Government and Politics

Citation

Cavallo, Alberto, and Eduardo Cavallo. "Are Crises Good for Long-term Growth? The Role of Political Institutions." Journal of Macroeconomics 32, no. 3 (September 2010): 838–857.
  • Find it at Harvard
  • Read Now

About The Author

Alberto F. Cavallo

Business, Government and the International Economy
→More Publications

More from the Authors

    • March 2022
    • Faculty Research

    International Macroeconomics with Global Crises

    By: Alberto Cavallo
    • March 2022
    • Faculty Research

    The Global Great Depression, 1929-1939

    By: Alberto Cavallo and Sophus A. Reinert
    • March 2022
    • Faculty Research

    Automercados Plaza's: Surviving Venezuela's Hyperinflation

    By: Alberto Cavallo
More from the Authors
  • International Macroeconomics with Global Crises By: Alberto Cavallo
  • The Global Great Depression, 1929-1939 By: Alberto Cavallo and Sophus A. Reinert
  • Automercados Plaza's: Surviving Venezuela's Hyperinflation By: Alberto Cavallo
ǁ
Campus Map
Harvard Business School
Soldiers Field
Boston, MA 02163
→Map & Directions
→More Contact Information
  • Make a Gift
  • Site Map
  • Jobs
  • Harvard University
  • Trademarks
  • Policies
  • Accessibility
  • Digital Accessibility
Copyright © President & Fellows of Harvard College