The end of an era? The medium- and long-term effects of the global crisis on growth in low-income countries
This paper investigates the medium- and long-term growth effects of the global financial crises on Low-Income Countries (LICs). Using several methodological approaches, including impulse response function analysis, growth spells techniques and panel regressions, we show that external demand (ED) shocks are not historically associated with sharp declines in output growth. Given existing evidence that LICs were primarily impacted by such a shock in the global financial crisis, our analysis provides some optimism on the chances that LICs will avoid a protracted period of slow growth. However, we also show that there seem to be persistent output losses associated with ED shocks in the medium-run. In terms of policy implications, our analysis provides evidence that countries with lower deficits, lower debt, more flexible exchange rate regimes, and a higher stock of international reserves are more likely to dampen the effects of an ED shock on growth.
|Date of creation:||2011|
|Date of revision:|
|Contact details of provider:|| Postal: Theodor-Lieser-Strasse 2, 06120 Halle(Saale)|
Phone: (+49) (0) 345 / 29 28 0
Fax: (+49) (0) 345 / 29 28 199
Web page: http://www.iamo.de/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Valerie Cerra & Sweta Chaman Saxena, 2008.
"Growth Dynamics: The Myth of Economic Recovery,"
American Economic Review,
American Economic Association, vol. 98(1), pages 439-57, March.
- Valerie Cerra & Sweta Chaman Saxena, 2007. "Growth dynamics: the myth of economic recovery," BIS Working Papers 226, Bank for International Settlements.
- Valerie Cerra & Sweta C. Saxena, 2005. "Growth Dynamics: The Myth of Economic Recovery," Macroeconomics 0508008, EconWPA.
- Sweta Chaman Saxena & Valerie Cerra, 2005. "Growth Dynamics: The Myth of Economic Recovery," IMF Working Papers 05/147, International Monetary Fund.
- Paul Collier & Benedikt Goderis, 2009.
"Structural Policies for Shock-Prone Developing Countries,"
Economics Series Working Papers
CSAE WPS/2009-03, University of Oxford, Department of Economics.
- Paul Collier & Benedikt Goderis, 2009. "Structural policies for shock-prone developing countries," Oxford Economic Papers, Oxford University Press, vol. 61(4), pages 703-726, October.
- Collier, Paul & Goderis, Benedikt, 2009. "Structural policies for shock-prone developing countries," MPRA Paper 17311, University Library of Munich, Germany.
- Paul Collier & Benedikt Goderis, 2009. "Structural Policies for Shock-Prone Developing Countries," CSAE Working Paper Series 2009-03, Centre for the Study of African Economies, University of Oxford.
- Jean Pisani-Ferry & Bruno van Pottelsberghe, 2009. "Handle with care! Post-crisis growth in the EU," Policy Briefs 301, Bruegel.
- Sanjay Reddy & Camelia Minoiu, 2009.
"Real Income Stagnation of Countries 1960-2001,"
Journal of Development Studies,
Taylor & Francis Journals, vol. 45(1), pages 1-23.
- Sanjay G. Reddy & Camelia Minoiu, 2005. "Real Income Stagnation of Countries, 1960-2001," Development and Comp Systems 0509004, EconWPA.
- Sanjay G. Reddy & Camelia Minoiu, 2006. "Real Income Stagnation of Countries, 1960-2001," Working Papers 28, United Nations, Department of Economics and Social Affairs.
- William Easterly & Michael Kremer & Lant Pritchett & Lawrence H. Summers, 1993.
"Good Policy or Good Luck? Country Growth Performance and Temporary Shocks,"
NBER Working Papers
4474, National Bureau of Economic Research, Inc.
- Easterly, William & Kremer, Michael & Pritchett, Lant & Summers, Lawrence H., 1993. "Good policy or good luck?: Country growth performance and temporary shocks," Journal of Monetary Economics, Elsevier, vol. 32(3), pages 459-483, December.
- Azariadis, Costas & Stachurski, John, 2005.
Handbook of Economic Growth,
in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 5
- Sanjeev Gupta & Catherine A. Pattillo & Kevin Joseph Carey, 2005. "Sustaining Growth Accelerations and Pro-Poor Growth in Africa," IMF Working Papers 05/195, International Monetary Fund.
- Furceri, Davide & Mourougane, Annabelle, 2012.
"The effect of financial crises on potential output: New empirical evidence from OECD countries,"
Journal of Macroeconomics,
Elsevier, vol. 34(3), pages 822-832.
- Davide Furceri & Annabelle Mourougane, 2009. "The Effect of Financial Crises on Potential Output: New Empirical Evidence from OECD Countries," OECD Economics Department Working Papers 699, OECD Publishing.
- Sergei Antoshin & Andrew Berg & Marcos Souto, 2008. "Testing for Structural Breaks in Small Samples," IMF Working Papers 08/75, International Monetary Fund.
- Chris Papageorgiou & Hans Weisfeld & Catherine A. Pattillo & Martin Schindler & Nicola Spatafora & Andrew Berg, 2011. "Global Shocks and their Impacton Low-Income Countries: Lessons From theglobal Financial Crisis," IMF Working Papers 11/27, International Monetary Fund.
- Benhabib, Jess & Spiegel, Mark M., 1994. "The role of human capital in economic development evidence from aggregate cross-country data," Journal of Monetary Economics, Elsevier, vol. 34(2), pages 143-173, October.
- International Monetary Fund, 2009. "Spillovers From the Rest of the World Into Sub-Saharan African Countries," IMF Working Papers 09/155, International Monetary Fund.
- International Monetary Fund, 2010. "FDI Flows to Low-Income Countries: Global Drivers and Growth Implications," IMF Working Papers 10/132, International Monetary Fund.
When requesting a correction, please mention this item's handle: RePEc:zbw:iamo11:25. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (ZBW - German National Library of Economics)
If references are entirely missing, you can add them using this form.