Business Cycles in Emerging Markets: the Role of Durable Goods and Financial Frictions
Fernando Alvarez-Parra (),
Luis Brandao-Marques and
Manuel Toledo
Authors registered in the RePEc Author Service: Luis Brandao Marques
No 243, Research Department working papers from CAF Development Bank Of Latinamerica
Abstract:
There is a growing literature studying business cycles in emerging economies. This paper contributes to this literature by examining how durable goods and financial frictions shape cyclical fluctuations in a small open economy subject to transitory and permanent shocks. We find that permanent shocks play a less important role driving the cycle in emerging economies than previously documented. We also find that financial frictions are crucial to explain some key business cycle properties of these economies. In our quantitative model, a countercyclical borrowing premium interacts with the purchase of durables to deliver highly volatile consumption and strongly countercyclical net exports.
Keywords: Sector financiero; Economía; Investigación socioeconómica (search for similar items in EconPapers)
Date: 2012
References: Add references at CitEc
Citations: View citations in EconPapers (3)
Downloads: (external link)
https://scioteca.caf.com/handle/123456789/243
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:dbl:dblwop:243
Access Statistics for this paper
More papers in Research Department working papers from CAF Development Bank Of Latinamerica Contact information at EDIRC.
Bibliographic data for series maintained by Pablo Rolando ().