Using a simple innovation-driven growth model I investigate to what extent labor market regulations underlie the devastating effects of output volatility on long-run growth trends. Empirical analysis conducted for 154 countries over the 1996-2005 period shows that an increase from low values of...

This paper empirically investigates the impact of GDP volatility on current account balances for a large sample of developed and developing countries. We extend the standard set of short- and long-term determinants of current accounts to include GDP volatility computed from the annual growth...