Growth Accelerations and Reversals in Emerging Market and Developing Economies: The Role of External Conditions

Bertrand Gruss, Malhar Nabar and Marcos Poplawski Ribeiro
Authors registered in the RePEc Author Service: Marcos Poplawski-Ribeiro

No 2018/052, IMF Working Papers from International Monetary Fund

Abstract: This paper investigates how country-specific external demand, external financial conditions, and terms of trade affect medium-term growth in Emerging Market and Developing Economies and the occurrence of growth accelerations and reversals. The importance of country-specific external conditions for medium-term growth has increased over time—in particular, the growing contribution of external financial conditions accounts for one-third of the increase in average income per capita growth between 1995–2004 and 2005–14. Stronger external demand and financial conditions significantly increase the probability of growth accelerations, while a strengthening of any of the three conditions significantly decreases the probability of reversals.

Keywords: WP; growth rate; real GDP; trading partner; Economic Growth; Emerging Markets; Developing Economies; External Conditions; income gap; windfall gain; terms-of-trade windfall; commodity exporter; gaps narrow; growth pattern; emerging market and developing economies; medium-term growth; terms of trade shock; oil-importing EMDEs; income level; Personal income; Commodity prices; Emerging and frontier financial markets; Purchasing power parity; Terms of trade; Global; Middle East; North Africa; Caribbean; Sub-Saharan Africa (search for similar items in EconPapers)
Pages: 39
Date: 2018-03-12
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Citations: View citations in EconPapers (4)

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