IS GOOD MACROECONOMIC MANAGEMENT IMPORTANT FOR GROWTH

The impact on growth of the quality of macroeconomic management, as me asured by various indicators, is tested for a sample of developing cou ntries. The measures include tile budget balance, the standard deviati on of the growth rate of the money stock, interest rates, real exchang e rate volatility and external indebtedness. It is found that poor mac roeconomic management significantly impairs growth. These results are robust to changes in the specification and extensions of the data set.