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Understanding Differences in Growth Performance in Latin America and Developing Countries between the Asian and Global Financial Crises

Author

Listed:
  • Roberto Alvarez

    () (University of Chile)

  • Jose De Gregorio

    () (Peterson Institute for International Economics)

Abstract

Latin American performance during the global financial crisis was unprecedented. Many developing and emerging countries successfully weathered the worst crisis since the Great Depression. Was it good luck? Was it good policies? In this paper we compare growth during the Asian and global financial crises and find that a looser monetary policy played an important role in mitigating crisis. We also find that higher private credit, more financial openness, less trade openness, and greater exchange rate intervention worsened economic performance. Our analysis of Latin American countries confirms that effective macroeconomic management was key to good economic performance. Finally, we present evidence from a sample of 31 emerging markets that high terms of trade had a positive impact on resilience.

Suggested Citation

  • Roberto Alvarez & Jose De Gregorio, 2014. "Understanding Differences in Growth Performance in Latin America and Developing Countries between the Asian and Global Financial Crises," Working Paper Series WP14-11, Peterson Institute for International Economics.
  • Handle: RePEc:iie:wpaper:wp14-11
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    References listed on IDEAS

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    Cited by:

    1. Thomas Barnebeck Andersen & Nikolaj Malchow-Møller, 2017. "The Macroeconomics Of A Delayed Recovery From The Global Financial Crisis: A Comparative Approach," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 62(05), pages 1179-1194, December.
    2. Erdal Özmen & Özge Doğanay Yaşar, 2015. "Emerging Markets Sovereign Bond Spreads, Credit Ratings and Global Financial Crisis," ERC Working Papers 1510, ERC - Economic Research Center, Middle East Technical University, revised Nov 2015.
    3. S. S. Abere & T. O. Akinbobola, 2020. "External Shocks, Institutional Quality, and Macroeconomic Performance in Nigeria," SAGE Open, , vol. 10(2), pages 21582440209, May.
    4. Esteban Pérez Caldentey & Alejandro González Castillo, 2015. "Investment, Financing and Minsky’s Debt Paradox. A Microeconomic Analysis for Latin America," Ensayos Económicos, Central Bank of Argentina, Economic Research Department, vol. 1(73), pages 57-90, December.
    5. Jose De Gregorio, 2015. "From Rapid Recovery to Slowdown: Why Recent Economic Growth in Latin America Has Been Slow," Policy Briefs PB15-6, Peterson Institute for International Economics.

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    More about this item

    Keywords

    Latin America; Emerging Markets; Developing Countries; Global Financial Crisis; Macroeconomic Policies;
    All these keywords.

    JEL classification:

    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy
    • F3 - International Economics - - International Finance

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