A note on the macroeconomic consequences of ethnic/racial tension
Source of Publication
© 2017 The Authors While many studies stressed the importance of ethnic fractionalization on long-term economic growth, neither ethnic fractionalization always leads to ethnic conflict nor the intensity of conflict is constant over time. To address this potential bias, we construct an ethnic/racial tension index by using the number of US news articles that contain certain keywords. Utilizing this index we test the predictions of a simple theoretical model in a Markov Switching framework which allows to identify the impact of ethnic/racial tension in different states of the economy. Consistent with our theoretical predictions, results show that the magnitude of the impact of ethnic/racial tension is larger during low-growth periods.
Arin, K. Peren; Koyuncu, Murat; and Spagnolo, Nicola, "A note on the macroeconomic consequences of ethnic/racial tension" (2017). Scopus Indexed Articles. 1327.