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Characterizing the Business Cycles of Emerging Economies / Calderon, Cesar
World Bank Open Knowledge Repository (formerly "World Bank E-Library Publications") Available online
View online- Format:
- Book
- Government document
- Author/Creator:
- Calderon, Cesar
- Series:
- Policy research working papers.
- World Bank e-Library.
- Language:
- English
- Subjects (All):
- Banks & Banking Reform.
- Business cycle.
- Business cycles.
- Central bank.
- Commodity prices.
- Credit markets.
- Currencies and Exchange Rates.
- Debt Markets.
- Domestic credit.
- Economic policies.
- Economic Theory & Research.
- Emerging economies.
- Emerging market.
- Emerging market economies.
- Emerging Markets.
- Exchange rate.
- Finance and Financial Sector Development.
- Financial markets.
- Financial shocks.
- Interest rate.
- International bank.
- Macroeconomic volatility.
- Macroeconomics and Economic Growth.
- Output loss.
- Private Sector Development.
- Tax.
- Trade regime.
- Local Subjects:
- Banks & Banking Reform.
- Business cycle.
- Business cycles.
- Central bank.
- Commodity prices.
- Credit markets.
- Currencies and Exchange Rates.
- Debt Markets.
- Domestic credit.
- Economic policies.
- Economic Theory & Research.
- Emerging economies.
- Emerging market.
- Emerging market economies.
- Emerging Markets.
- Exchange rate.
- Finance and Financial Sector Development.
- Financial markets.
- Financial shocks.
- Interest rate.
- International bank.
- Macroeconomic volatility.
- Macroeconomics and Economic Growth.
- Output loss.
- Private Sector Development.
- Tax.
- Trade regime.
- Physical Description:
- 1 online resource (46 pages)
- Place of Publication:
- Washington, D.C., The World Bank, 2010
- System Details:
- data file
- Summary:
- Using the dating algorithm by Harding and Pagan (2002) on a quarterly database for 23 emerging market economies (EMEs) and 12 developed countries over the period 1980.Q1 - 2006.Q2, the authors proceed to characterize and compare the business cycle features of these two groups. They first find that recessions are deeper and more frequent among EMEs (especially, among LAC countries) and that expansions are more sizable and longer (especially, among East Asian countries). After this characterization, this paper explores the linkages between the cost of recessions (as measured by the average annual rate of output loss in the peak-to-trough phase of the cycle) and several country-specific factors. The main findings are: (a) adverse terms of trade shocks raises the cost of recessions in countries with a more open trade regime, deeper financial markets and, surprisingly, a more diversified output structure. (b) U.S. interest rate shocks seem to have a significant impact on the cost of recessions in East Asian countries. (c) Recessions tend to be deeper if they coincide with a sudden stop, but the effect tends to be mitigated in countries with deeper domestic credit markets. (d) Countries with stronger institutions tend to have less costly recessions.
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