The Real Effect of Financial Crises in the European Transition Economies

Davide Furceri and Aleksandra Zdzienicka ()

No 920, Working Papers from Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon

Abstract: The aim of this work is to assess the impact of financial crises on output for 11 European transition economies (CEECs). The results suggest that financial crises have a significant and permanent effect, lowering long-term output by about 17 percent. The effect is more important in smaller countries, with relative higher dependence on external financing, and in which the banking sector noticed more important financial disequilibria. We also found that fiscal policy measures have been the most efficient tools in dealing with the crises, while the role of monetary policy instruments has been rather blinded. Exchange rate resulted to be more a propagator than a crises absorber, while the IMF credit has been found to have positive (but not significant) impact on growth performance. Finally, the effect for the CEECs is much bigger than in the EU advanced economies, for which we found that financial crises lowers long-term output only by 2 percent.

Keywords: Output Growth; Financial Crisis; CEECs. (search for similar items in EconPapers)
JEL-codes: E6 G1 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2009
New Economics Papers: this item is included in nep-cba, nep-eec and nep-fdg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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ftp://ftp.gate.cnrs.fr/RePEc/2009/0920.pdf (application/pdf)

Related works:
Journal Article: The real effect of financial crises in the European transition economies (2011)
Working Paper: The Real Effect of Financial Crises in the European Transition Economies (2011)
Working Paper: The Real Effect of Financial Crises in the European Transition Economies (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:gat:wpaper:0920

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