caa a22 4500 397544847 CHVBK 20180308164736.0 cr unu---uuuuu 161202e199610 xx s 000 0 eng 10.2307/2297796 doi (NATIONALLICENCE)oxford-10.2307/2297796 Policy Variability and Economic Growth [Elektronische Daten] [Hugo A. Hopenhayn, María E. Muniagurria] This paper explores the effect of policy variability (or frequency of regime switching) on economic growth and welfare. We study a one-sector growth model where investment can be subsidized at either a positive rate or not subsidized at all. We find that the lack of persistence in policies per se need not be welfare reducing and that it is likely to decrease growth. Higher variability implies more frequent changes in consumption and investment. But, by creating a stronger intertemporal link across regimes, variability reduces the fluctuation in investment rates, thus decreasing the magnitude of changes in consumption and increasing welfare. © 1996 The Review of Economic Studies Limited Hopenhayn Hugo A. University of Rochester and Universitat Pompeu-Fabra aut Muniagurria María E. University of Wisconsin-Madison aut The Review of Economic Studies Wiley-Blackwell 63/4(1996-10), 611-625 0034-6527 63:4<611 1996 63 restud https://doi.org/10.2307/2297796 text/html Onlinezugriff via DOI 1 research-article jats NATIONALLICENCE 856 40 https://doi.org/10.2307/2297796 text/html Onlinezugriff via DOI NATIONALLICENCE 700 1- Hopenhayn Hugo A. University of Rochester and Universitat Pompeu-Fabra aut NATIONALLICENCE 700 1- Muniagurria María E. University of Wisconsin-Madison aut NATIONALLICENCE 773 0- The Review of Economic Studies Wiley-Blackwell 63/4(1996-10), 611-625 0034-6527 63:4<611 1996 63 restud Metadata rights reserved CC BY-NC-4.0 http://creativecommons.org/licenses/by-nc/4.0 nationallicence BK010053 XK010053 XK010000 NATIONALLICENCE NATIONALLICENCE NL-oxford