The Transformation and Performance of Emerging Market Economies Across the Great Divide of the Global Financial Crisis

Michael Bordo and Pierre Siklos

No 26342, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The process of central bank (CB) evolution by emerging market economies (EMEs), including central bank independence (CBI) and transparency (CBT), converged towards that of the advanced economies (AEs) before the Global Financial Crisis (GFC) of 2007-2008. It was greatly aided by the adoption of inflation targeting. In this paper we evaluate this convergence process for a representative set of EMEs and AEs since the disruption of the GFC. We use several measures of institutional development (changes in CBI, changes in CBT, changes in a new index of institutional resilience and changes in a new measure of CB credibility). We then use panel VARs based on both factor models and observed data to ascertain the impact of global shocks, financial shocks, trade shocks and credibility shocks on the EMEs versus the AEs. We find that although some EMEs did maintain the levels of CBI and CBT that they had before the crisis, on average they experienced a decline in institutional resilience to shocks and in the quality of their governance. Moreover it appears that CB credibility in EMEs was more fragile than was the case for the AEs in the face of the global shocks (from the US) than was the case for the AEs.

JEL-codes: E52 E58 F0 (search for similar items in EconPapers)
Date: 2019-10
New Economics Papers: this item is included in nep-mac and nep-mon
Note: IFM ME
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Downloads: (external link)
http://www.nber.org/papers/w26342.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:26342

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w26342

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().