How Resilient Were Emerging Economies to the Global Crisis?

Hevia, ConstantinoDidier, TatianaSchmukler, Sergio L.2012-03-192012-03-192011-04-01https://hdl.handle.net/10986/3408This paper studies the cross-country incidence of the 2008-2009 global crisis and documents a structural break in the way emerging economies responded to the global shock. Contrary to popular perceptions, emerging market economies suffered growth collapses comparable, or even larger, to those experienced by advanced economies during the crisis. With such large financial and real shock, most of the world economy came to a halt when the crisis hit, with most countries resuming their pre-crisis growth rates afterwards. While emerging economies were not able to avoid the crisis collapse, they grew at a higher rate during the post crisis, relative to before and, as usual, to advanced countries. Moreover, emerging economies initiated their recovery sooner. Breaking with the past, emerging economies were able to conduct countercyclical policies, and became more similar to developed countries in softening the impact of the crisis and in their ability to pursue expansionary policies.CC BY 3.0 IGOACCESS TO FUNDSADVANCED COUNTRIESADVANCED ECONOMIESASSET PRICESASSET VALUESASSETSBALANCE SHEETBALANCE SHEETSBANK CLAIMSBANK LOANSBANKRUPTCYBUFFERSBUSINESS CYCLECAPITAL FLOWCAPITAL FLOWSCAPITAL INFLOWSCAPITAL MARKETSCAPITAL OUTFLOWSCENTRAL BANKCENTRAL BANKSCOINCOMMODITIESCOMMODITYCOMMODITY PRICESCONSENSUS FORECASTCONSUMERSCREDIBILITYCREDIT RISKCURRENCYCURRENCY CRISESCURRENCY MISMATCHESCURRENCY VALUECURRENT ACCOUNTCURRENT ACCOUNT DEFICITCURRENT ACCOUNT DEFICITSCURRENT ACCOUNT POSITIONSDEBTDECELERATION IN GROWTHDEPRECIATIONDEPRESSIONDEVALUATIONDEVALUATIONSDEVELOPING COUNTRIESDEVELOPMENT ECONOMICSDEVELOPMENT POLICYDIRECT INVESTMENTDOMESTIC BANKING SYSTEMDOMESTIC CREDITDOMESTIC CURRENCIESDOMESTIC CURRENCYDOMESTIC ECONOMIESDOMESTIC FINANCIAL SECTORSDOMESTIC FINANCIAL SYSTEMSECONOMETRIC ANALYSISECONOMIC OUTLOOKECONOMIC PERFORMANCEECONOMIC SLOWDOWNEMERGING ECONOMIESEMERGING MARKETEMERGING MARKET COUNTRIESEMERGING MARKET ECONOMIESEMERGING MARKETSEQUITY MARKETSEQUITY PRICESEXCESS RETURNEXCHANGE RATEEXCHANGE RATE FLUCTUATIONSEXCHANGE RATE POLICIESEXCHANGE RATE POLICYEXCHANGE RATE REGIMEEXCHANGE RATESEXPANSIONARY POLICIESEXPORT VOLUMESEXPORTEREXPORTERSEXPORTSEXPOSUREEXPOSURESEXTERNAL BALANCEEXTERNAL POSITIONSEXTERNAL SHOCKEXTERNAL SHOCKSFEDERAL RESERVEFEDERAL RESERVE BANKFINANCIAL COLLAPSEFINANCIAL CONTAGIONFINANCIAL CRISESFINANCIAL CRISISFINANCIAL FACTORSFINANCIAL INSTITUTIONSFINANCIAL INTEGRATIONFINANCIAL INTERMEDIARIESFINANCIAL MARKETFINANCIAL MARKETSFINANCIAL OPENNESSFINANCIAL POLICIESFINANCIAL POLICYFINANCIAL SECTORFINANCIAL SECTORSFINANCIAL SYSTEMFINANCIAL SYSTEMSFINANCIAL VULNERABILITIESFINANCIALLY OPEN ECONOMIESFISCAL CONSOLIDATIONSFISCAL POLICIESFISCAL POLICYFLEXIBLE EXCHANGE RATEFLEXIBLE EXCHANGE RATE REGIMESFORECASTSFOREIGN ASSETFOREIGN ASSET POSITIONFOREIGN ASSETSFOREIGN CAPITALFOREIGN CURRENCYFOREIGN CURRENCY DEBTFOREIGN DEBTFOREIGN FINANCINGFOREIGN FUNDSFOREIGN INVESTMENTSFOREIGN INVESTORSFOREIGN LIABILITIESFOREIGN RESERVESGDPGDP PER CAPITAGENERAL EQUILIBRIUMGLOBAL DEMANDGLOBAL EXPORTGLOBAL FINANCIAL MARKETSGLOBAL FINANCIAL SYSTEMGLOBALIZATIONGOVERNMENT ACTIONSGROSS DOMESTIC PRODUCTGROWTH PROJECTIONSGROWTH RATEGROWTH RATESHEDGE FUNDSHOUSING FINANCEILLIQUID ASSETSIMPLICIT GOVERNMENT GUARANTEESIMPORTSINCOMEINCOME GROUPSINCOME LEVELSINFLATIONINFLATION TARGETINGINSTITUTIONAL CAPACITYINSURANCEINTEREST RATESINTERNATIONAL DEBTINTERNATIONAL ECONOMICSINTERNATIONAL FINANCIAL INTEGRATIONINTERNATIONAL FINANCIAL SYSTEMINTERNATIONAL INVESTORSINTERNATIONAL RESERVEINTERNATIONAL RESERVESINTERNATIONAL TRADEINVENTORIESINVENTORYLEADING INDICATORSLEVERAGELIQUIDITYLOCAL CURRENCYLONG-TERM ASSETSMACROECONOMIC POLICIESMACROECONOMIC POLICYMACROECONOMIC VARIABLESMACROECONOMICSMARKET INTERESTMARKET RATESMATURITY MISMATCHESMONETARY POLICIESMONETARY POLICYMONETARY REGIMESMONEY MARKETMORAL HAZARDMORTGAGEMORTGAGE MARKETSMUTUAL FUNDMUTUAL FUNDSOPEN ECONOMIESOPPORTUNITY COSTSOUTPUTPORTFOLIOPORTFOLIOSPOSITIVE SPILLOVERPOSITIVE SPILLOVER EFFECTSPRICE OF OILPUBLIC DEBTREAL GDPREAL SHOCKRECESSIONRECESSIONSREGULATORY REQUIREMENTSRESERVE ACCUMULATIONRESIDENTIAL MORTGAGESRESPONSE TO SHOCKSSECURITIESSHORT-TERM DEBTSHORT-TERM LIABILITIESSTOCK MARKETSTOCK MARKET CAPITALIZATIONSTOCK MARKETSSYSTEMIC RISKT-BILLSTAXTAX REVENUESTOTAL DEBTTRANSMISSION MECHANISMSTROUGHUNCERTAINTYVENTURE CAPITALISTWAGESWEALTHWHOLESALE FUNDSWHOLESALE MARKETWORLD ECONOMYHow Resilient Were Emerging Economies to the Global Crisis?World Bank10.1596/1813-9450-5637