Emerging Market Heterogeneity: Insights from Cluster and Taxonomy Analysis

34 Pages Posted: 31 Aug 2015

See all articles by Zhongxia Zhang

Zhongxia Zhang

International Monetary Fund (IMF)

Yuan Gao

International Monetary Fund (IMF)

Date Written: July 2015

Abstract

This paper studies growth patterns in Emerging Market Economies (EMs) from the perspective on clusters and taxonomies. First, it documents developments over the past five decades in EMs and uses a cluster analysis to better understand convergence and the investment-growth nexus. Second, it looks at the performance of EMs since 2000 and develops a taxonomy to classify countries according to their factor endowments as well as their real and financial external linkages. The taxonomy offers insights on growth dynamics pre and post the global financial crisis. Results highlight the high degree of heterogeneity in EMs and the need for more granular and targeted near and long-term policy advice.

Keywords: growth, heterogeneity, cluster analysis, taxonomy, Economic Growth of Open Economies, Macroeconomic Analyses of Economic Development,

JEL Classification: E32, F43, O11, O47

Suggested Citation

Zhang, Zhongxia and Gao, Yuan, Emerging Market Heterogeneity: Insights from Cluster and Taxonomy Analysis (July 2015). IMF Working Paper No. 15/155, Available at SSRN: https://ssrn.com/abstract=2653608

Zhongxia Zhang (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Yuan Gao

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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