Banking Crises and Short and Medium Term Output Losses in Emerging and Developing Countries: The Role of Structural and Policy Variables

Davide Furceri and Aleksandra Zdzienicka ()

World Development, 2012, vol. 40, issue 12, 2369-2378

Abstract: The aim of this paper is to assess the dynamic impact of banking crises on output for a panel of developing economies. Using an unbalanced panel of 159 countries from 1970 to 2006, the paper shows that banking crises produce significant output losses. Output losses are larger for relatively richer economies, characterized by a higher level of financial deepening and larger current account imbalances. Flexible exchange rates, fiscal and monetary policy, and liquidity support policies have been found to attenuate the effect of the crises.

Keywords: output losses; financial crisis; developing countries; emerging economies (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (29)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:wdevel:v:40:y:2012:i:12:p:2369-2378

DOI: 10.1016/j.worlddev.2012.03.021

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