Emerging Market Fluctuations : What Makes the Di erence?

Aggregate fluctuations in emerging countries are quantitatively larger and qualitatively different in key respects from those in developed countries. Using data from Mexico and Canada, this paper decomposes these differences in terms of shocks to a...

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Main Author:	Hevia, Constantino
Format:	Policy Research Working Paper
Language:	English
Published:	2012
Subjects:	ABSOLUTE VALUE ACCELERATOR ADJUSTMENT COST ADJUSTMENT COST PARAMETER ADJUSTMENT COSTS AFFILIATED ORGANIZATIONS AGENCY COSTS AGGREGATE INVESTMENT ALLOCATION ARIMA BEHAVIOR OF INVESTMENT BEHAVIOR OF PRICES BOND BONDS BUSINESS CYCLE BUSINESS CYCLES CAPITAL ACCUMULATION CAPITAL FLOWS CAPITAL FORMATION CAPITAL GOODS CAPITAL RATIO CAPITAL STOCK CLOSED ECONOMY COLLATERAL CONSTANT RETURNS TO SCALE CONSUMPTION EXPENDITURES CONSUMPTION GOOD CONSUMPTION GOODS COUNTRY RISK COVARIANCE MATRIX CURRENT ACCOUNT DEBT DEFAULT RISK DEPRECIATION DEPRECIATION RATE DEPRESSION DEVELOPING COUNTRIES DISTORTION DISTORTIONS ECONOMIC ACTIVITY ECONOMIC RESEARCH ECONOMIC THEORY ELASTICITY EMERGING ECONOMIES EMERGING MARKET EMERGING MARKET BUSINESS EQUILIBRIUM EXPECTED UTILITY EXTERNAL DEBT FINANCIAL CRISES FOREIGN DEBT FOREIGN INTEREST RATES FUNCTIONAL FORMS GDP GENERAL EQUILIBRIUM GENERAL EQUILIBRIUM ANALYSIS GOVERNMENT EXPENDITURES GROSS DOMESTIC PRODUCT GROWTH RATE GROWTH RATES IMPORTS INCOME INCOME TAX INDUSTRIAL COUNTRIES INTEREST RATE INTEREST RATES INTERNATIONAL ECONOMICS INVENTORIES INVESTMENT DECISIONS INVESTMENT EXPENDITURES INVESTMENT RISK LEVERAGE MACROECONOMIC POLICIES MACROECONOMICS MARGINAL PRODUCT MARGINAL UTILITY MAXIMUM LIKELIHOOD ESTIMATION MONETARY ECONOMICS MONETARY POLICY NET EXPORTS OPEN ECONOMIES OPEN ECONOMY OPTIMIZATION OUTPUT OUTPUT RATIO OUTPUT RATIOS POLITICAL ECONOMY POPULATION GROWTH PRIVATE CONSUMPTION PRODUCTION FUNCTION PRODUCTION FUNCTIONS PRODUCTIVITY GROWTH PUBLIC POLICY REAL INTEREST RATES RECESSION RECESSIONS RELATIVE PRICE RISK AVERSION RISK PREMIUM SLACK STANDARD DEVIATION STEADY STATE STICKY WAGES STOCK OF CAPITAL SURPLUS TAX TAX RATE TOTAL FACTOR PRODUCTIVITY TRANSMISSION MECHANISMS TROUGH UNEMPLOYMENT UNEMPLOYMENT RATE UTILITY FUNCTION VOLATILITY WEALTH WORKING CAPITAL WORLD DEVELOPMENT INDICATORS WORLD INTEREST RATE WORLD INTEREST RATES
Online Access:	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20090408124920 http://hdl.handle.net/10986/4091

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spelling	okr-10986-40912021-04-23T14:02:15Z Emerging Market Fluctuations : What Makes the Di erence? Hevia, Constantino ABSOLUTE VALUE ACCELERATOR ADJUSTMENT COST ADJUSTMENT COST PARAMETER ADJUSTMENT COSTS AFFILIATED ORGANIZATIONS AGENCY COSTS AGGREGATE INVESTMENT ALLOCATION ARIMA BEHAVIOR OF INVESTMENT BEHAVIOR OF PRICES BOND BONDS BUSINESS CYCLE BUSINESS CYCLES CAPITAL ACCUMULATION CAPITAL FLOWS CAPITAL FORMATION CAPITAL GOODS CAPITAL RATIO CAPITAL STOCK CLOSED ECONOMY COLLATERAL CONSTANT RETURNS TO SCALE CONSUMPTION EXPENDITURES CONSUMPTION GOOD CONSUMPTION GOODS COUNTRY RISK COVARIANCE MATRIX CURRENT ACCOUNT DEBT DEFAULT RISK DEPRECIATION DEPRECIATION RATE DEPRESSION DEVELOPING COUNTRIES DISTORTION DISTORTIONS ECONOMIC ACTIVITY ECONOMIC RESEARCH ECONOMIC THEORY ELASTICITY EMERGING ECONOMIES EMERGING MARKET EMERGING MARKET BUSINESS EQUILIBRIUM EXPECTED UTILITY EXTERNAL DEBT FINANCIAL CRISES FOREIGN DEBT FOREIGN INTEREST RATES FUNCTIONAL FORMS GDP GENERAL EQUILIBRIUM GENERAL EQUILIBRIUM ANALYSIS GOVERNMENT EXPENDITURES GROSS DOMESTIC PRODUCT GROWTH RATE GROWTH RATES IMPORTS INCOME INCOME TAX INDUSTRIAL COUNTRIES INTEREST RATE INTEREST RATES INTERNATIONAL ECONOMICS INVENTORIES INVESTMENT DECISIONS INVESTMENT EXPENDITURES INVESTMENT RISK LEVERAGE MACROECONOMIC POLICIES MACROECONOMICS MARGINAL PRODUCT MARGINAL UTILITY MAXIMUM LIKELIHOOD ESTIMATION MONETARY ECONOMICS MONETARY POLICY NET EXPORTS OPEN ECONOMIES OPEN ECONOMY OPTIMIZATION OUTPUT OUTPUT RATIO OUTPUT RATIOS POLITICAL ECONOMY POPULATION GROWTH PRIVATE CONSUMPTION PRODUCTION FUNCTION PRODUCTION FUNCTIONS PRODUCTIVITY GROWTH PUBLIC POLICY REAL INTEREST RATES RECESSION RECESSIONS RELATIVE PRICE RISK AVERSION RISK PREMIUM SLACK STANDARD DEVIATION STEADY STATE STICKY WAGES STOCK OF CAPITAL SURPLUS TAX TAX RATE TOTAL FACTOR PRODUCTIVITY TRANSMISSION MECHANISMS TROUGH UNEMPLOYMENT UNEMPLOYMENT RATE UTILITY FUNCTION VOLATILITY WEALTH WORKING CAPITAL WORLD DEVELOPMENT INDICATORS WORLD INTEREST RATE WORLD INTEREST RATES Aggregate fluctuations in emerging countries are quantitatively larger and qualitatively different in key respects from those in developed countries. Using data from Mexico and Canada, this paper decomposes these differences in terms of shocks to aggregate efficiency and shocks that distort the decisions of households about how much to invest, consume, and work in a standard model of a small open economy. The decomposition exercise suggests that most of these differences are explained by fluctuations in aggregate efficiency, distortions in labor decisions over the business cycle, and, most importantly, fluctuations in country risk. Other distortions are quantitatively less important. 2012-03-19T19:09:50Z 2012-03-19T19:09:50Z 2009-04-01 http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20090408124920 http://hdl.handle.net/10986/4091 English Policy Research working paper ; no. WPS 4897 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank Publications & Research :: Policy Research Working Paper The World Region The World Region
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	ABSOLUTE VALUE ACCELERATOR ADJUSTMENT COST ADJUSTMENT COST PARAMETER ADJUSTMENT COSTS AFFILIATED ORGANIZATIONS AGENCY COSTS AGGREGATE INVESTMENT ALLOCATION ARIMA BEHAVIOR OF INVESTMENT BEHAVIOR OF PRICES BOND BONDS BUSINESS CYCLE BUSINESS CYCLES CAPITAL ACCUMULATION CAPITAL FLOWS CAPITAL FORMATION CAPITAL GOODS CAPITAL RATIO CAPITAL STOCK CLOSED ECONOMY COLLATERAL CONSTANT RETURNS TO SCALE CONSUMPTION EXPENDITURES CONSUMPTION GOOD CONSUMPTION GOODS COUNTRY RISK COVARIANCE MATRIX CURRENT ACCOUNT DEBT DEFAULT RISK DEPRECIATION DEPRECIATION RATE DEPRESSION DEVELOPING COUNTRIES DISTORTION DISTORTIONS ECONOMIC ACTIVITY ECONOMIC RESEARCH ECONOMIC THEORY ELASTICITY EMERGING ECONOMIES EMERGING MARKET EMERGING MARKET BUSINESS EQUILIBRIUM EXPECTED UTILITY EXTERNAL DEBT FINANCIAL CRISES FOREIGN DEBT FOREIGN INTEREST RATES FUNCTIONAL FORMS GDP GENERAL EQUILIBRIUM GENERAL EQUILIBRIUM ANALYSIS GOVERNMENT EXPENDITURES GROSS DOMESTIC PRODUCT GROWTH RATE GROWTH RATES IMPORTS INCOME INCOME TAX INDUSTRIAL COUNTRIES INTEREST RATE INTEREST RATES INTERNATIONAL ECONOMICS INVENTORIES INVESTMENT DECISIONS INVESTMENT EXPENDITURES INVESTMENT RISK LEVERAGE MACROECONOMIC POLICIES MACROECONOMICS MARGINAL PRODUCT MARGINAL UTILITY MAXIMUM LIKELIHOOD ESTIMATION MONETARY ECONOMICS MONETARY POLICY NET EXPORTS OPEN ECONOMIES OPEN ECONOMY OPTIMIZATION OUTPUT OUTPUT RATIO OUTPUT RATIOS POLITICAL ECONOMY POPULATION GROWTH PRIVATE CONSUMPTION PRODUCTION FUNCTION PRODUCTION FUNCTIONS PRODUCTIVITY GROWTH PUBLIC POLICY REAL INTEREST RATES RECESSION RECESSIONS RELATIVE PRICE RISK AVERSION RISK PREMIUM SLACK STANDARD DEVIATION STEADY STATE STICKY WAGES STOCK OF CAPITAL SURPLUS TAX TAX RATE TOTAL FACTOR PRODUCTIVITY TRANSMISSION MECHANISMS TROUGH UNEMPLOYMENT UNEMPLOYMENT RATE UTILITY FUNCTION VOLATILITY WEALTH WORKING CAPITAL WORLD DEVELOPMENT INDICATORS WORLD INTEREST RATE WORLD INTEREST RATES
spellingShingle	ABSOLUTE VALUE ACCELERATOR ADJUSTMENT COST ADJUSTMENT COST PARAMETER ADJUSTMENT COSTS AFFILIATED ORGANIZATIONS AGENCY COSTS AGGREGATE INVESTMENT ALLOCATION ARIMA BEHAVIOR OF INVESTMENT BEHAVIOR OF PRICES BOND BONDS BUSINESS CYCLE BUSINESS CYCLES CAPITAL ACCUMULATION CAPITAL FLOWS CAPITAL FORMATION CAPITAL GOODS CAPITAL RATIO CAPITAL STOCK CLOSED ECONOMY COLLATERAL CONSTANT RETURNS TO SCALE CONSUMPTION EXPENDITURES CONSUMPTION GOOD CONSUMPTION GOODS COUNTRY RISK COVARIANCE MATRIX CURRENT ACCOUNT DEBT DEFAULT RISK DEPRECIATION DEPRECIATION RATE DEPRESSION DEVELOPING COUNTRIES DISTORTION DISTORTIONS ECONOMIC ACTIVITY ECONOMIC RESEARCH ECONOMIC THEORY ELASTICITY EMERGING ECONOMIES EMERGING MARKET EMERGING MARKET BUSINESS EQUILIBRIUM EXPECTED UTILITY EXTERNAL DEBT FINANCIAL CRISES FOREIGN DEBT FOREIGN INTEREST RATES FUNCTIONAL FORMS GDP GENERAL EQUILIBRIUM GENERAL EQUILIBRIUM ANALYSIS GOVERNMENT EXPENDITURES GROSS DOMESTIC PRODUCT GROWTH RATE GROWTH RATES IMPORTS INCOME INCOME TAX INDUSTRIAL COUNTRIES INTEREST RATE INTEREST RATES INTERNATIONAL ECONOMICS INVENTORIES INVESTMENT DECISIONS INVESTMENT EXPENDITURES INVESTMENT RISK LEVERAGE MACROECONOMIC POLICIES MACROECONOMICS MARGINAL PRODUCT MARGINAL UTILITY MAXIMUM LIKELIHOOD ESTIMATION MONETARY ECONOMICS MONETARY POLICY NET EXPORTS OPEN ECONOMIES OPEN ECONOMY OPTIMIZATION OUTPUT OUTPUT RATIO OUTPUT RATIOS POLITICAL ECONOMY POPULATION GROWTH PRIVATE CONSUMPTION PRODUCTION FUNCTION PRODUCTION FUNCTIONS PRODUCTIVITY GROWTH PUBLIC POLICY REAL INTEREST RATES RECESSION RECESSIONS RELATIVE PRICE RISK AVERSION RISK PREMIUM SLACK STANDARD DEVIATION STEADY STATE STICKY WAGES STOCK OF CAPITAL SURPLUS TAX TAX RATE TOTAL FACTOR PRODUCTIVITY TRANSMISSION MECHANISMS TROUGH UNEMPLOYMENT UNEMPLOYMENT RATE UTILITY FUNCTION VOLATILITY WEALTH WORKING CAPITAL WORLD DEVELOPMENT INDICATORS WORLD INTEREST RATE WORLD INTEREST RATES Hevia, Constantino Emerging Market Fluctuations : What Makes the Di erence?
geographic_facet	The World Region The World Region
relation	Policy Research working paper ; no. WPS 4897
description	Aggregate fluctuations in emerging countries are quantitatively larger and qualitatively different in key respects from those in developed countries. Using data from Mexico and Canada, this paper decomposes these differences in terms of shocks to aggregate efficiency and shocks that distort the decisions of households about how much to invest, consume, and work in a standard model of a small open economy. The decomposition exercise suggests that most of these differences are explained by fluctuations in aggregate efficiency, distortions in labor decisions over the business cycle, and, most importantly, fluctuations in country risk. Other distortions are quantitatively less important.
format	Publications & Research :: Policy Research Working Paper
author	Hevia, Constantino
author_facet	Hevia, Constantino
author_sort	Hevia, Constantino
title	Emerging Market Fluctuations : What Makes the Di erence?
title_short	Emerging Market Fluctuations : What Makes the Di erence?
title_full	Emerging Market Fluctuations : What Makes the Di erence?
title_fullStr	Emerging Market Fluctuations : What Makes the Di erence?
title_full_unstemmed	Emerging Market Fluctuations : What Makes the Di erence?
title_sort	emerging market fluctuations : what makes the di erence?
publishDate	2012
url	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20090408124920 http://hdl.handle.net/10986/4091
_version_	1764389875185876992

Emerging Market Fluctuations : What Makes the Di erence?

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