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The Cross-Country Incidence of the Global Crisis

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Listed:
  • Philip Lane

    (Institute for International Integration Studies, Trinity College Dublin)

  • Gian Maria Milesi-Ferretti

    (International Monetary Fund, Research Department and CEPR)

Abstract

We examine whether the cross-country incidence and severity of the 2008-2009 global recession is systematically related to pre-crisis macroeconomic and financial factors. We find that the pre-crisis level of development, increases in the ratio of private credit to GDP, current account deficits, and openness to trade are helpful in understanding the intensity of the crisis. International risk sharing did little to shield domestic demandfrom the countryspecific component of output declines, while those countries with large pre-crisis current account deficits saw domestic demand fall by much more than domestic output during the crisis.

Suggested Citation

  • Philip Lane & Gian Maria Milesi-Ferretti, 2010. "The Cross-Country Incidence of the Global Crisis," The Institute for International Integration Studies Discussion Paper Series iiisdp333, IIIS.
  • Handle: RePEc:iis:dispap:iiisdp333
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    More about this item

    Keywords

    financial crisis; current account; private credit; international financial integration.;
    All these keywords.

    JEL classification:

    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies

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