Economic growth regimes: Evidence from Latin America

Abstract

This paper studies the effect of economic instability, income inequality and openness in the transition to different growth regimes for 18 Latin American countries during the 1980-2014 period. The study is carried out determining three different levels: low, middle and high economic growth. The countries are categorised according to the method of k-median clustering. We use panel data estimation applying random effects model and ordered logit. The results indicate that instability and inequality negatively affect the economic performance of the region, while openness is not a significant factor in explaining economic growth.