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How resilient and countercyclical were emerging economies to the global financial crisis ?

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  • Didier, Tatiana
  • Hevia, Constantino
  • Schmukler, Sergio L.

Abstract

During the crises of the 1990s, emerging economies usually lacked the policy tools to deal with external shocks that were available to advanced economies. Worldwide turbulent episodes found most emerging economies unable to perform countercyclical policies and, in many cases, their own vulnerabilities and poor institutional frameworks amplified negative external shocks leading to sharper recessions. This paper shows that the 2008-2009 global financial crisis represents a structural break in the way emerging economies conduct their policies, with more countercyclical policies pursued before and during the global crisis. Moreover, breaking with the past, emerging economies did not fall more than developed economies during the global financial crisis, thus becoming more similar to developed economies. The resilience of emerging economies during the 2008-2009 crisis might be partly attributed to a combination of sounder macroeconomic and financial policy frameworks with a shift towards safer domestic and international financial stances.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 5637.

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Date of creation: 01 Apr 2011
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Handle: RePEc:wbk:wbrwps:5637

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Keywords: Currencies and Exchange Rates; Economic Theory&Research; Emerging Markets; Debt Markets; Banks&Banking Reform;

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References

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Citations

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Cited by:
  1. Richard Pomfret, 2012. "The Post-2007 Crises and Europe's Place in the Global Economy," CASE Network Studies and Analyses, CASE-Center for Social and Economic Research 439, CASE-Center for Social and Economic Research.
  2. Francisco Ceballos & Tatiana Didier & Sergio L. Schmukler, 2012. "Financial Globalization in Emerging Countries : Diversification vs. Offshoring," Macroeconomics Working Papers 23350, East Asian Bureau of Economic Research.
  3. Feryel Ouerghi, 2013. "Global Financial Crisis: Did Exchange Rate Politics Help Emerging Countries To Be More Resilient," International Journal of Economics and Financial Issues, Econjournals, vol. 3(4), pages 949 - 963.
  4. World Bank, 2013. "Global Development Horizons : Capital for the Future - Saving and Investment in an Interdependent World," World Bank Publications, The World Bank, number 13431, August.
  5. Türkcan, Kemal, 2014. "Investigating the Role of Extensive Margin, Intensive Margin, Price and Quantity Components on Turkey’s Export Growth during 1998-2011," MPRA Paper 53292, University Library of Munich, Germany.
  6. Pierre-Olivier Gourinchas & Maurice Obstfeld, 2012. "Stories of the Twentieth Century for the Twenty-First," American Economic Journal: Macroeconomics, American Economic Association, American Economic Association, vol. 4(1), pages 226-65, January.
  7. Didier, Tatiana & Schmukler, Sergio L., 2014. "Financial development in Asia : beyond aggregate indicators," Policy Research Working Paper Series 6761, The World Bank.
  8. Kathryn M.E. Dominguez & Yuko Hashimoto & Takatoshi Ito, 2011. "International Reserves and the Global Financial Crisis," NBER Working Papers 17362, National Bureau of Economic Research, Inc.
  9. Didier, Tatiana & Hevia, Constantino & Schmukler, Sergio L., 2012. "How resilient and countercyclical were emerging economies during the global financial crisis?," Journal of International Money and Finance, Elsevier, Elsevier, vol. 31(8), pages 2052-2077.
  10. Ceballos, Francisco & Didier, Tatiana & Hevia, Constantino & Schmukler, Sergio, 2012. "Respuestas de política a la crisis financiera global: ¿Qué hicieron diferente las economías emergentes?," Revista Estudios Económicos, Banco Central de Reserva del Perú, Banco Central de Reserva del Perú, issue 24, pages 27-43.
  11. Ceballos, Francisco & Didier, Tatiana & Hevia, Constantino & Schmukler, Sergio, 2013. "Policy Responses to the Global Financial Crisis: What Did Emerging Economies Do Differently?," Working Papers, Banco Central de Reserva del Perú 2013-002, Banco Central de Reserva del Perú.
  12. Didier, Tatiana & Schmukler, Sergio L., 2013. "Financial development in Latin America and the Caribbean : stylized facts and the road ahead," Policy Research Working Paper Series 6582, The World Bank.
  13. World Bank, 2014. "Turkey Public Finance Review : Turkey in Transition--Time for a Fiscal Policy Pivot?," World Bank Other Operational Studies 19321, The World Bank.
  14. Richard Pomfret, 2011. "Global Crises, Fiscal Imbalances and Global Instability: Interests and Reactions of Asian Economies," School of Economics Working Papers, University of Adelaide, School of Economics 2011-33, University of Adelaide, School of Economics.

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