Scholars and pundits often argue that political polarization represents a threat for economic growth. Since polarization implies a potential shift in the policy preferences of elected governments, markets may react to potential volatile polities by reducing investment and thus affecting the scope of economic growth. This paper analyzes the relationship between polarization at the party system level and growth volatility in Latin America during the 1993-2020 period. While we build on previous scholarship that documents a positive relationship between polarization and growth volatility, we suggest that the aforementioned relationship is not linear. Specifically, we argue that higher levels of polarization at the party system level may provide investors and economic agents with clear policy signals that reduce economic uncertainty and ultimately growth volatility. Our empirical results indicate that the relationship between our main independent and dependent variables is curvilinear (inverted U shape).