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Author: Ms.Camelia Minoiu
Publisher: International Monetary Fund
ISBN: 1455209406
Category : Business & Economics
Languages : en
Pages : 41
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Book Description
We examine the cyclical properties of development aid using bilateral data for 22 donors and over 100 recipients during 1970?2005. We find that bilateral aid flows are on average procyclical with respect to business cycles in donor and recipient countries. However, they become countercyclical when recipient countries face large adverse shocks to the terms-of-trade or growth collapses-thus playing an important cushioning role. Aid outlays contract sharply during severe donor economic downturns; this effect is magnified by higher public debt levels. Additionally, bilateral aid flows are higher in the presence of IMF programs and are more countercyclical for recipient countries with stronger institutions.
Author: Ms.Camelia Minoiu
Publisher: International Monetary Fund
ISBN: 1455209406
Category : Business & Economics
Languages : en
Pages : 41
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Book Description
We examine the cyclical properties of development aid using bilateral data for 22 donors and over 100 recipients during 1970?2005. We find that bilateral aid flows are on average procyclical with respect to business cycles in donor and recipient countries. However, they become countercyclical when recipient countries face large adverse shocks to the terms-of-trade or growth collapses-thus playing an important cushioning role. Aid outlays contract sharply during severe donor economic downturns; this effect is magnified by higher public debt levels. Additionally, bilateral aid flows are higher in the presence of IMF programs and are more countercyclical for recipient countries with stronger institutions.
Author: Ms.Valerie Cerra
Publisher: International Monetary Fund
ISBN: 1513536990
Category : Business & Economics
Languages : en
Pages : 50
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Book Description
Traditionally, economic growth and business cycles have been treated independently. However, the dependence of GDP levels on its history of shocks, what economists refer to as “hysteresis,” argues for unifying the analysis of growth and cycles. In this paper, we review the recent empirical and theoretical literature that motivate this paradigm shift. The renewed interest in hysteresis has been sparked by the persistence of the Global Financial Crisis and fears of a slow recovery from the Covid-19 crisis. The findings of the recent literature have far-reaching conceptual and policy implications. In recessions, monetary and fiscal policies need to be more active to avoid the permanent scars of a downturn. And in good times, running a high-pressure economy could have permanent positive effects.
Author: Mr.Pau Rabanal
Publisher: International Monetary Fund
ISBN: 1451875657
Category : Business & Economics
Languages : en
Pages : 68
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Book Description
Our answer: Not so well. We reached that conclusion after reviewing recent research on the role of technology as a source of economic fluctuations. The bulk of the evidence suggests a limited role for aggregate technology shocks, pointing instead to demand factors as the main force behind the strong positive comovement between output and labor input measures.
Author: Jeffrey G. Fuhrer
Publisher:
ISBN: 9780894991257
Category : Business & Economics
Languages : en
Pages : 0
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Book Description
The topic is one of the most important but perplexing issues in all of economics: What causes business cycles? These are the proceedings of the forty-second annual economic conference of the Federal Reserve Bank of Boston,. Business cycle theory suggests that unanticipated good or bad "shocks" occur periodically and create fluctuations around a long-run trend. Monetary and fiscal policy then must act to smooth the fluctuations. But shocks are a less than fully satisfying explanation of the business cycle. What economic behavior lies behind these shocks? What causes consumers to alternate between spending sprees and retrenchment? Why is investment spending so volatile, and what causes businesses to suddenly lay off large numbers of works at a time, or even close down altogether? Do monetary and fiscal policies contribute to economic fluctuations?
Author: Mohan Bijapur
Publisher:
ISBN:
Category :
Languages : en
Pages : 49
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Book Description
We study jointly the roles of aggregate and idiosyncratic uncertainty shocks in driving business cycle fluctuations. By decomposing total stock return volatility of approximately 30,000 publicly-listed US firms from 1962 to 2012, we construct distinct measures of aggregate and idiosyncratic uncertainty, and run a horse race between them in an otherwise standard macroeconomic VAR. We find that the two components of uncertainty exhibit strikingly different behaviour. Idiosyncratic uncertainty shocks account for a large fraction of fluctuations in economic activity at business cycle frequencies, whereas the contributions of aggregate uncertainty shocks are negligible. Idiosyncratic, not aggregate, uncertainty shocks produce the “sharp drop and rapid rebound” response in activity characterized in Bloom (2009). Furthermore, most of the contribution of idiosyncratic uncertainty shocks appears to come from the largest 100 firms in the economy. These act as a primary force driving the business cycle, accounting for up to half of all fluctuations and exhibiting substantial independent variation from common structural forces. In contrast, shocks to the remaining mass of small firms are found to be quantitatively insignificant. Our results are interpreted as an empirical microfoundation for “granular” origins to the role of idiosyncratic uncertainty at the macroeconomic level, in the sense of Gabaix (2011).
Author: Victor Zarnowitz
Publisher: University of Chicago Press
ISBN: 0226978923
Category : Business & Economics
Languages : en
Pages : 613
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Book Description
This volume presents the most complete collection available of the work of Victor Zarnowitz, a leader in the study of business cycles, growth, inflation, and forecasting.. With characteristic insight, Zarnowitz examines theories of the business cycle, including Keynesian and monetary theories and more recent rational expectation and real business cycle theories. He also measures trends and cycles in economic activity; evaluates the performance of leading indicators and their composite measures; surveys forecasting tools and performance of business and academic economists; discusses historical changes in the nature and sources of business cycles; and analyzes how successfully forecasting firms and economists predict such key economic variables as interest rates and inflation.
Author: Andrea Raffo
Publisher: DIANE Publishing
ISBN: 1437939104
Category : Business & Economics
Languages : en
Pages : 55
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Book Description
Understanding the joint dynamics of internat. prices and quantities remains a central issue in internat. bus. cycles. Internat. relative prices appreciate when domestic consumption and output increase more than their foreign counterparts. In addition, both trade flows and trade prices display sizable volatility. This paper incorporates Hicks-neutral and investment-specific TS into a standard two-country general equilibrium model with variable capacity utilization and weak wealth effects on labor supply. Investment-specific TS introduce a source of fluctuations in absorption similar to taste shocks, thus reconciling theory and data. Also presents implications for the transmission mechanism of TS across countries. Illus. This is a print on demand pub.
Author: Claudio E. Raddatz
Publisher: World Bank Publications
ISBN:
Category : Business cycles
Languages : en
Pages : 53
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Book Description
External shocks, such as commodity price fluctuations, natural disasters, and the role of the international economy, are often blamed for the poor economic performance of low-income countries. The author quantifies the impact of these different external shocks using a panel vector autoregression (VAR) approach and compares their relative contributions to output volatility in low-income countries vis-à-vis internal factors. He finds that external shocks can only explain a small fraction of the output variance of a typical low-income country. Internal factors are the main source of fluctuations. From a quantitative perspective, the output effect of external shocks is typically small in absolute terms, but significant relative to the historic performance of these countries.
Author: Mr.Ayhan Kose
Publisher: International Monetary Fund
ISBN: 1451870019
Category : Business & Economics
Languages : en
Pages : 51
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Book Description
This paper analyzes the evolution of the degree of global cyclical interdependence over the period 1960-2005. We categorize the 106 countries in our sample into three groups-industrial countries, emerging markets, and other developing economies. Using a dynamic factor model, we then decompose macroeconomic fluctuations in key macroeconomic aggregates-output, consumption, and investment-into different factors. These are: (i) a global factor, which picks up fluctuations that are common across all variables and countries; (ii) three group-specific factors, which capture fluctuations that are common to all variables and all countries within each group of countries; (iii) country factors, which are common across all aggregates in a given country; and (iv) idiosyncratic factors specific to each time series. Our main result is that, during the period of globalization (1985-2005), there has been some convergence of business cycle fluctuations among the group of industrial economies and among the group of emerging market economies. Surprisingly, there has been a concomitant decline in the relative importance of the global factor. In other words, there is evidence of business cycle convergence within each of these two groups of countries but divergence (or decoupling) between them.
Author: Jordi Galí
Publisher: University of Chicago Press
ISBN: 0226278875
Category : Business & Economics
Languages : en
Pages : 663
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Book Description
United States monetary policy has traditionally been modeled under the assumption that the domestic economy is immune to international factors and exogenous shocks. Such an assumption is increasingly unrealistic in the age of integrated capital markets, tightened links between national economies, and reduced trading costs. International Dimensions of Monetary Policy brings together fresh research to address the repercussions of the continuing evolution toward globalization for the conduct of monetary policy. In this comprehensive book, the authors examine the real and potential effects of increased openness and exposure to international economic dynamics from a variety of perspectives. Their findings reveal that central banks continue to influence decisively domestic economic outcomes—even inflation—suggesting that international factors may have a limited role in national performance. International Dimensions of Monetary Policy will lead the way in analyzing monetary policy measures in complex economies.
