RT Journal Article
SR Electronic
T1 A Test of the Regional Growth-Instability Frontier Using State Data
JF Land Economics
JO Land Econ
FD University of Wisconsin Press
SP 442
OP 462
DO 10.2307/3146901
VO 78
IS 3
A1 Chandra, Siddharth
YR 2002
UL http://le.uwpress.org/content/78/3/442.abstract
AB The application of the portfolio framework to the economy predicts the existence of a convex growth-instability frontier. Using two data sets on Gross State Product for the states of the United States, this hypothesis is tested. The tests confirm the existence of a convex frontier for economic growth and instability. The shape of the frontier is estimated, and growth-adjusted measures of economic instability based on the frontier are computed. Over long periods of time, economic instability is negatively correlated with a range of measures of economic diversity, providing further support for the portfolio view of economic growth. (JEL R11)