Economic Growth (Aisen & Veiga)

How does political instability affect economic growth? by Ari Aisen and Francisco J. Veiga published by European Journal of Political Economy indicated by Alvaro Manoel. “The purpose of this paper is to empirically determine the effects of political instability on economic growth…Regarding the channels of transmission, we find that political instability adversely affects growth by lowering the rates of productivity growth and, to a smaller degree, physical and human capital accumulation. Finally, economic freedom and ethnic homogeneity are beneficial to growth, while democracy may have a small negative effect.”