EconPapers    
Economics at your fingertips  
 

Understanding Emerging Market Business Cycles

Stephen McKnight and Laura Povoledo

Serie documentos de trabajo del Centro de Estudios Económicos from El Colegio de México, Centro de Estudios Económicos

Abstract: We document important differences between developed and emerging market economies relating to international relative prices and quantities. In emerging economies, imports are more volatile than exports, the terms of trade is less volatile, and net exports are strongly countercyclical. Moreover, the terms of trade is acyclical or weakly countercyclical, while it is procyclical in developed countries. We compare three mechanisms which could account for the empirical evidence: trend productivity shocks, interest-rate shocks in the presence of financial frictions, and informality. We find that trend productivity shocks are necessary to replicate the observed behaviour of the open-economy variables.

Keywords: Emerging Markets; Business Cycles; Terms of Trade; Net Exports; Informality (search for similar items in EconPapers)
JEL-codes: E32 F41 F44 (search for similar items in EconPapers)
Date: 2024-05
New Economics Papers: this item is included in nep-dge, nep-ifn and nep-opm
References: Add references at CitEc
Citations:

Downloads: (external link)
https://cee.colmex.mx/dts/2024/DT-2024-2.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:emx:ceedoc:2024-02

Access Statistics for this paper

More papers in Serie documentos de trabajo del Centro de Estudios Económicos from El Colegio de México, Centro de Estudios Económicos Contact information at EDIRC.
Bibliographic data for series maintained by Ximena Varela ().

 
Page updated 2025-02-08
Handle: RePEc:emx:ceedoc:2024-02