How Resilient and Countercyclical Were Emerging Economies to the Global Financial Crisis?

50 Pages Posted: 20 Apr 2016

See all articles by Tatiana Didier

Tatiana Didier

World Bank

Constantino Hevia

Universidad Torcuato Di Tella - Departamento de Economia

Sergio L. Schmukler

World Bank - Development Research Group (DECRG)

Date Written: April 1, 2011

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.

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

Suggested Citation

Didier, Tatiana and Hevia, Constantino and Schmukler, Sergio, How Resilient and Countercyclical Were Emerging Economies to the Global Financial Crisis? (April 1, 2011). World Bank Policy Research Working Paper No. 5637. Available at SSRN: https://ssrn.com/abstract=1817440

Tatiana Didier (Contact Author)

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States
(202)458-1525 (Phone)

Constantino Hevia

Universidad Torcuato Di Tella - Departamento de Economia ( email )

Minones 2177
1428 Buenos Aires
Argentina

Sergio Schmukler

World Bank - Development Research Group (DECRG) ( email )

1818 H. Street, N.W.
MSN MC 3-301
Washington, DC 20433
United States
202-458-4167 (Phone)
202-522-3518 (Fax)

HOME PAGE: http://www.worldbank.org/en/about/people/s/sergio-schmukler

Register to save articles to
your library

Register

Paper statistics

Downloads
397
Abstract Views
1,610
rank
73,499
PlumX Metrics