Business-cycle volatility has no impact on long-run growth, study finds.
The study looked at how the ups and downs of the economy (business-cycle volatility) affect long-term growth. By considering changes in growth trends and differences between countries, the researchers found that business-cycle volatility doesn't directly impact growth. However, they did find that persistent volatility can have a negative effect on growth. This has important implications for understanding the impact of financial crises and comparing growth across different countries.