TY  - JOUR
AU  - Burnside,Craig
AU  - Tabova,Alexandra
TI  - Risk, Volatility, and the Global Cross-Section of Growth Rates
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 15225
PY  - 2009
Y2  - August 2009
UR  - http://www.nber.org/papers/w15225
L1  - http://www.nber.org/papers/w15225.pdf
N1  - Author contact info:
Craig Burnside
Department of Economics
Duke University
213 Social Sciences Building
Durham, NC 27708-0097
Tel: 919/660-1808
Fax: 919/684-8974
E-Mail: craig.burnside@duke.edu

Alexandra M. Tabova
Department of Economics
Duke University
Durham, NC 27708
E-Mail: alexandra.tabova@duke.edu
AB  - We reconsider the empirical links between volatility and growth between 1970 and 2007. There is a strong and significant correlation between individual country growth rates and global factors that are arguably exogenous with respect to their economies. The amount of volatility driven by these external factors is highly correlated, cross-sectionally, with the overall amount of volatility in GDP growth. There is also a strong correlation between a country's average growth rate and the magnitude and sign of its exposure to global factors. We interpret our findings as a partial answer to the question "Why doesn't capital flow from rich to poor countries?" We argue that low-income countries that grow slowly are riskier from the perspective of the marginal international investor.
ER  -