Figure 5
Left panel (A): The vertical axis is labeled “Predicted E W with positive 10 percent delta in Institutional Quality,” ranging from negative 5 to negative 1 with an interval of 1. The horizontal axis is labeled “Time,” ranging from negative 0 to 30 with an interval of 10. Black dots mark predicted values for each time point, with blue vertical error bars indicating uncertainty. The curve for blue dots starts at (1, negative 2.4), quickly falls, stabilizes around negative 5 as time increases, and ends at (31, negative 5). The vertical bars follow the same trends, with their lower sides at (1, negative 3.85), (17, negative 5.35), and (31, negative 5.35), while the upper sides are at (1, negative 0.86), (17, negative 4.6), and (31, negative 4.6). Right panel (B): The vertical axis is labeled “Predicted E W with negative 10 percent delta in Institutional Quality,” ranging from 1 to 5 with an interval of 1. The horizontal axis is the same as in (A). Black dots mark predicted values for each time point, with blue vertical error bars. The curve for blue dots begins at (1, 2.33), shows a rapid increase, and plateaus just above (19, 5). The vertical bars follow the same trends, with their lower sides at (1, 0.8), (19, 4.7), and (31, 4.7), while the upper sides are at (1, 3.75), (19, 5.3), and (31, 5.3). Note: All the numerical data values are approximated.(a), (b) The Impulse Response Plot for Institutional Quality and Economic Welfare. It indicates a 10% increase and decrease in weak institutions and its effect on economic Welfare. The dots show the average prediction value, and the dark blue to light blue line specifies 75, 90 and 95% confidence intervals, respectively. Source(s): Authors’ computation