Characterizing The Business Cycles Of Emerging Economies

We 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 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.[JEL E32, O14, O47] Acknowledgments: We thank an anonymous referee and the editor for very helpful comments on an earlier version of the paper.

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“…Similar results are also presented by Calderón and Fuentes (2010). The observed differences are only weakly statistically significant.…”

Section: Normal Versus Financial Recessionssupporting

confidence: 87%

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

Coricelli

Karadimitropoulou

León‐Ledesma

2016

The B.E. Journal of Macroeconomics

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“…Tal padrão adviria da forma como se propagam os choques nos termos de intercâmbio e das paradas súbitas de capital. A especialização na produção e exportação em recursos naturais afetaria negativamente tanto a dinâmica de curto e médio prazo, capturada nos ciclos, quanto a tendência de expansão no longo prazo, por comprometer a formação bruta de capital (Calderón;Fuentes, 2010;Caldentey;Titelman;Carvallo, 2013;IMF, 2015).…”

Section: Canais De Transmissão Das Variações Nos Preços Das Commoditiunclassified

O ciclo de alta nos preços das commodities e a economia brasileira: uma análise dos mecanismos externos de transmissão entre 2002 e 2014

Bredow

Cunha

2016

Econ. soc.

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Resumo Este trabalho analisa a influência do recente ciclo de alta dos preços das commodities sobre a entrada de capital externo no Brasil (exportações, investimentos em carteira e IED). Para o alcance desse objetivo, foram utilizadas duas metodologias econométricas diferentes: Modelos de Mudanças de Regimes Markovianos e Modelo Vetorial de Correção de Erros (VAR/VEC). Nossos resultados sugerem que: (i) o recente período de alta dos preços das commodities ocorreu entre 2002 e 2014; (ii) os regimes de alta estimados para as exportações, IED e Investimento Estrangeiro em Carteira (IEC) ocorreram em períodos similares ao observado para a série dos preços das commodities; e (iii) os modelos VAR/VEC indicam a alta dos preços das commodities influenciou significativamente a entrada de capital externo no Brasil, particularmente nas vendas externas de mercadorias e nos fluxos financeiros de curto prazo.

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“…The term δk f SE,t is an expense for the firm since capital in 21 Note that combining the law of motion for capital held by the firm and the law of motion for capital in self-employment yields a standard law of motion for total capital in the economy. 22 One can introduce a resource cost of supplying capital to proxy for the administrative and monitoring costs associated with the supply of input credit. Introducing such a cost does not change the main results of the paper.…”

Section: Productionmentioning

confidence: 99%

Self-employment and business cycle persistence: Does the composition of employment matter for economic recoveries?

Shapiro

2014

Journal of Economic Dynamics and Control

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Self-employment comprises an important share of employment in many countries. Recent studies document that self-employment expands during downturns, a fact that arises from higher transition rates out of unemployment and into self-employment in recessions. Furthermore, countries with higher self-employment shares exhibit lower output persistence over the business cycle. In this paper, I build a business cycle model with frictional labor markets where individuals can be self-employed or employed in salaried firms. I show that economies with larger self-employment shares exhibit faster recoveries following a negative economy-wide productivity shock. Differences in the ease of entry into self-employment as the economy recovers play a key role in explaining contrasting labor market and output dynamics.The model successfully captures some of the key cyclical patterns of self-employment, as well as the quantitative relationship between self-employment and cyclical output persistence in the data.JEL Classification: E02, E24, E32

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Characterizing The Business Cycles Of Emerging Economies

Cited by 25 publications

References 50 publications

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

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

O ciclo de alta nos preços das commodities e a economia brasileira: uma análise dos mecanismos externos de transmissão entre 2002 e 2014

Self-employment and business cycle persistence: Does the composition of employment matter for economic recoveries?

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