scholarly journals Growth Dynamics: The Myth of Economic Recovery

2008 ◽  
Vol 98 (1) ◽  
pp. 439-457 ◽  
Author(s):  
Valerie Cerra ◽  
Sweta Chaman Saxena
Keyword(s):  
Civil Wars ◽  
Financial Crises ◽  
Emerging Market ◽  
Growth Dynamics ◽  
Economic Recovery ◽  
Large Set ◽  
Output Loss ◽  
Political Crises ◽  
Robust Evidence ◽  
Large Output

Using panel data for a large set of high-income, emerging market, developing, and transition countries, we find robust evidence that the large output loss from financial crises and some types of political crises is highly persistent. The results on financial crises are also highly robust to the assumption on exogeneity. Moreover, we find strong evidence of growth over optimism before financial crises. We also find a distinction between the output impact of civil wars versus other crises, in that there is a partial output rebound for civil wars but no significant rebound for financial crises or the other political crises. (JEL D72, D74, E32, E44, O17, O47)

scholarly journals Growth Dynamics: The Myth of Economic Recovery: Comment

2012 ◽  
Vol 102 (7) ◽  
pp. 3774-3777 ◽  
Author(s):  
Hannes Mueller
Keyword(s):  
Civil War ◽  
Civil Wars ◽  
Growth Dynamics ◽  
Economic Recovery

This comment highlights different ways of coding crisis episodes in Cerra and Saxena (2008) (CS). The comment shows that the coding used for civil war implies a misrepresentation of its impact. A correct coding of civil war reveals that the average civil war leads to a loss in output of 18 percent. This makes civil wars more devastating than all other crisis studied by CS.

scholarly journals Reallocation effects of recessions and financial crises: an industry-level analysis

2016 ◽  
Vol 16 (2) ◽  
Author(s):  
Fabrizio Coricelli ◽  
Aikaterini E. Karadimitropoulou ◽  
Miguel A. Leon-Ledesma
Keyword(s):  
Emerging Markets ◽  
Emerging Economies ◽  
Financial Crises ◽  
Value Added ◽  
Developed Countries ◽  
Large Set ◽  
Allocation Of Resources ◽  
Developed Economies ◽  
Manufacturing Sectors ◽  
Level Analysis

AbstractWe characterize the behavior of disaggregate manufacturing sectors for a large set of developed and emerging markets around recession dates. We uncover some relevant stylized facts. The dispersion in value added (VA) growth rates in developed economies is counter-cyclical, whereas for emerging countries it is pro-cyclical. Recoveries are more productivity-driven in developed countries as opposed to employment-driven for emerging markets. Around recession episodes sectoral-level misallocation of resources does not significantly change in developed economies, whereas it increases in emerging economies during financial crises. Therefore, there is no evidence that recessions improve the allocation of resources across industries.

scholarly journals Systemic Risk Indicators Based on Nonlinear PolyModel

2018 ◽  
Vol 12 (1) ◽  
pp. 2 ◽  
Author(s):  
Xingxing Ye ◽  
Raphael Douady
Keyword(s):  
Financial Market ◽  
Systemic Risk ◽  
Financial Crises ◽  
Economic Benefit ◽  
Risk Indicators ◽  
Large Set ◽  
Theoretical Simulation ◽  
Nonlinear Factor Analysis ◽  
Nonlinear Approach ◽  
Covered Call

The global financial market has become extremely interconnected as it demonstrates strong nonlinear contagion in times of crisis. As a result, it is necessary to measure financial systemic risk in a comprehensive and nonlinear approach. By establishing a large set of risk factors as the main bones of the financial market network and applying nonlinear factor analysis in the form of so-called PolyModel, this paper proposes two systemic risk indicators that can prognosticate the advent and trace the development of financial crises. Through financial network analysis, theoretical simulation, empirical data analysis and final validation, we argue that the indicators suggested in this paper are proved to be very effective in forecasting and tracing the financial crises from 1998 to 2017. The economic benefit of the indicator is evidenced by the enhancement of a protective put/covered call strategy on major stock markets.

scholarly journals UNCERTAINTY IN THE FLUCTUATIONS OF THE PRICE OF STOCKS

2007 ◽  
Vol 18 (11) ◽  
pp. 1689-1697 ◽  
Author(s):  
G. R. JAFARI ◽  
M. SADEGH MOVAHED ◽  
P. NOROUZZADEH ◽  
A. BAHRAMINASAB ◽  
MUHAMMAD SAHIMI ◽  
...  
Keyword(s):  
Stock Prices ◽  
Emerging Market ◽  
Critical Time ◽  
Gaussian Probability Density Function ◽  
Political Crises ◽  
Time Period ◽  
Non Gaussian ◽  
Large Increments ◽  
Probability Density Function Pdf ◽  
Multiplicative Processes

We report on a study of the Tehran Price Index (TEPIX) from 2001 to 2006 as an emerging market that has been affected by several political crises during the recent years, and analyze the non-Gaussian probability density function (PDF) of the log returns of the stock prices. We show that while the average of the index did not fall very much over the time period of the study, its day-to-day fluctuations strongly increased due to the crises. Using an approach based on multiplicative processes with a detrending procedure, we study the scale-dependence of the non-Gaussian PDFs, and show that the temporal dependence of their tails indicates a gradual and systematic increase in the probability of the appearance of large increments in the returns on approaching distinct critical time scales over which the TEPIX has exhibited maximum uncertainty.

Statement by the Managing Director on the Work Program of the Executive Board - Executive Board Meeting, November 22, 2010

Policy Papers ◽  
2010 ◽  
Vol 2010 (82) ◽  
Author(s):  
Keyword(s):  
Employment Growth ◽  
Emerging Market ◽  
Capital Inflows ◽  
Economic Recovery ◽  
Board Meeting ◽  
Executive Board ◽  
Work Program ◽  
Emerging Market Countries ◽  
Sustainable Recovery ◽  
Global Growth

Persistent challenges: The multi-speed nature of the global economic recovery is testing the system, with strains already appearing in the form of large capital inflows to many emerging market countries and exchange rate pressures. At the same time, slow employment growth, high indebtedness, and remaining financial sector fragilities in some countries could yet derail a fragile recovery. Only cooperative approaches will succeed in relieving tensions and building a strong and sustainable recovery, based on a more balanced pattern of global growth.

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