A Decade after the 2009 Global Recession: Macroeconomic Developments

Wee Chian Koh and Shu Yu

No 9290, Policy Research Working Paper Series from The World Bank

Abstract: Emerging markets and developing economies (EMDEs) weathered the 2009 global recession relatively well. However, the impact of the global recession varied across economies. EMDEs with stronger pre-crisis fundamentals -- such as large foreign exchange reserves, sound fiscal positions, and low inflation -- suffered milder growth slowdowns, in part due to their greater capacity to engage in monetary and fiscal stimulus. Low-income countries were also resilient, as foreign aid and inflows of remittances remained relatively stable. In contrast, EMDEs that were heavily dependent on short-term capital flows -- such as portfolio investment and cross -- border bank lending—fared less well, especially those in Europe and Central Asia. A key lesson for EMDEs is the need to strengthen macroeconomic frameworks and create policy space to prepare for future global downturns.

Keywords: International Trade and Trade Rules; Investment and Investment Climate; Commodity Risk Management; Inequality; Macroeconomic Management (search for similar items in EconPapers)
Date: 2020-06-22
New Economics Papers: this item is included in nep-mac
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Journal Article: A Decade After the 2009 Global Recession: Macroeconomic Developments (2021)
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