Business Cycles in Developing Countries: Are They Different?
John Rand () and
Finn Tarp ()
MPRA Paper from University Library of Munich, Germany
According to Lucas (1981) understanding business cycles is the first step in designing appropriate stabilization policies. In this paper, we demonstrate a series of ways in which developing countries differ from their developed counterparts when focus is on the nature and characteristics of macroeconomic fluctuations. Cycles are shorter, making it necessary to modify the filtering procedures normally applied for industrialized countries. This leads to different stylized facts of the business cycle across countries and regions, and the developing countries are more diverse than the rather uniform industrialized countries. Great care is therefore needed when the causal mechanisms in economic models are specified. A “one-size fits all” approach is unlikely to be appropriate.
Keywords: Developing countries; stabilization policies; macroeconomic fluctuations; business cycles (search for similar items in EconPapers)
JEL-codes: E32 O11 O21 (search for similar items in EconPapers)
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Journal Article: Business Cycles in Developing Countries: Are They Different? (2002)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:62445
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