It is common practice to estimate the volatility-growth link by specifying a standard growth equation such that the variance of the error term appears as an explanatory variable in this growth equation. The variance in turn is modelled by a second equation. Hardly any of existing applications of...

A model of growth with endogenous innovation and distortionary taxes is presented. Since innovation is the only source of volatility, any variable that influences innovation directly affects volatility and growth. This joint endogeneity is illustrated by working out the effects through which...

Several empirical papers have shown that international trade has a positive causal effect on a country's GDP or growth rate. A common conclusion from these results is that a free trade policy will increase a country's GDP. This comment does not dispute the empirical findings per se but questions...