Managing Economic Volatility and Crises

Over the past ten years, economic volatility has come into its own after being treated for decades as a secondary phenomenon in business cycle literature. This evolution has been driven by the recognition of the permanent negative effects of volatility on long-run growth and inequality, especially in poor countries. After presenting basic features of volatility, this volume investigates commodity price volatility as an absorber and amplifier of shocks. The collection then examines macroeconomic crises, which are driven by the same phenomena that make volatility difficult to treat effectively.

This collection explores the pehnomenon of economic volatility, which studies show had adverse effects on long-run growth, especially in poor countries. Its contribution is to bring together concepts, empirical results, and policy recommendations in a relatively new field in economics. After presenting basic features of volatility, including the impact of volatility on growth and poverty, the volume investigates commodity price volatility and the financial sector in its dual role as an absorber and amplifier of shocks. The collection then examines macroeconomic crises, which are driven by the same phenomena that make volatility difficult to treat effectively.