A note on the macroeconomic consequences of ethnic/racial tension

作者：Arin K Peren; Koyuncu Murat; Spagnolo Nicola^*

来源：Economics Letters, 2017, 155: 100-103.

DOI：10.1016/j.econlet.2017.02.015

• Ethnic tension
• Markov Switching
• News
• Racial tension

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.