"Business Cycles in Emerging Economies:The Role of Interest Rates," Working Papers 01-12, New York University, Leonard N. Stern School of Business, Department of Economics. Pablo Neumeyer & Fabrizio Perri, 2004. "Business cycles in emerging economies: the role of interest rates," Staff Report 335, Federal Reserve Bank of Minneapolis. Summary: Emerging market countries have enjoyed an exceptionally favorable economic environment throughout 2004, 2005, and early 2006. In particular, accommodative U.S. monetary policy in recent years has helped create an environment of low interest rates in international capital markets. We find that in a sample of emerging economies business cycles are more volatile than in developed ones, real interest rates are countercyclical and lead the cycle, consumption is more volatile than output and net exports are strongly countercyclical. We present a model of a small open economy, where the real interest rate is decomposed in an The research was carried out in the tradition of the following empirical research on business cycles and economic interest rate on deposits In a business cycles in developing countries are An empirical study estimated the contribution of the interest rate shocks to the variance in output growth at 5.1% in Mexico within the framework of stochastic growth models for small open economies. We replicate this study with the same dataset and investigate which parameters affect the contribution of the interest rate shocks to business cycles.
Keywords: exchange rate regimes, growth, boom-and-bust cycles, Emerging Europe, East exchange rate volatility on growth for two groups of countries in the economic that this “informal dollar standard” was the basis for a high degree of encouraging (low interest rate) international capital inflows, speculative capital
informal economy, and (2) countercyclical interest rates in emerging countries. I show that in a two-sector real business cycle model of a small open economy with a poorly measured informal sector, an increase in country interest rate generates a contraction in output, consumption, investment, hours, an improvement in trade balance-to-output ratio, and an expansion of informal sector. I document (1) a positive relationship between the relative volatility of consumption to output and the size of the informal economy, and (2) countercyclical interest rates in emerging countries. I show that in a two-sector real business cycle model of a small open economy with a poorly measured informal sector, Business Cycles in Emerging Economies:The Role of Interest Rates Article in Journal of Monetary Economics 52(2) · November 2001 with 67 Reads How we measure 'reads' We find that in a sample of emerging economies business cycles are more volatile than in developed ones, real interest rates are countercyclical and lead the cycle, consumption is more volatile than output and net exports are strongly countercyclical. We present a model of a small open economy, Interest Rates and Business Cycles in Emerging Economies This section documents empirical regularities about business cycles and interest rates in five open emerging economies: Argentina, Brazil, Korea, Mexico, and Philippines. The rate of interest in an economy is an important reflection of the time preferences of individuals. People are willing to forgo some amount of current consumption in order to invest in production processes which promise finished goods that are valued higher than the sum of the inputs to the production process.
other hand, show that a DSGE model with interest rate shocks and a financial business cycle for a sample of selected emerging market economies. community of people that has developed informal relations through kinship, repeated.
on the effects of informal labour markets in business cycle fluctuations. that in economies with large informal labour markets the interest rate channel of monetary Given the importance of the informal economy for developing countries, the The strong relation between interest rates and business cycles in emerging economies is at odds with the minor role played by interest rate shocks in previous Interest Rates, Leverage, and Business Cycles in Emerging Economies: The Role of Financial Frictions by Andrés Fernández and Adam Gulan. Published in emerging economies and their impact on global economic, social and Emerging Asia continues to record positive GDP growth rates with 6.6% in 2018 sensitive to national security interest, and to minority investments in any US business confidence that underpins a virtuous cycle of investment, growth and opportunity,. Business Cycles, Informal Economy, and Interest Rates in Emerging Countries. J Horvath. Journal of Macroeconomics 55, 96-116, 2018. 18, 2018. Keywords: exchange rate regimes, growth, boom-and-bust cycles, Emerging Europe, East exchange rate volatility on growth for two groups of countries in the economic that this “informal dollar standard” was the basis for a high degree of encouraging (low interest rate) international capital inflows, speculative capital
25 Feb 2010 Keywords: Emerging markets, labor markets, business cycles, search frictions In our paper, negative TFP shocks coupled with higher interest rates two country groups is the size of the informal sector and therefore the size
Interest Rates and Business Cycles in Emerging Economies This section documents empirical regularities about business cycles and interest rates in five open emerging economies: Argentina, Brazil, Korea, Mexico, and Philippines. The rate of interest in an economy is an important reflection of the time preferences of individuals. People are willing to forgo some amount of current consumption in order to invest in production processes which promise finished goods that are valued higher than the sum of the inputs to the production process. Business Cycles, Informal Economy, and Interest Rates in Emerging Countries. SSRN Electronic Journal , CrossRef; Google Scholar and Talan, D. (2007) Employment dynamics: Small and large firms over the business cycle. Monthly Labor Review March, 39–50 Business Cycles, Informal Economy, and Interest Rates in Emerging Countries. SSRN Macroeconomic fluctuations in developing countries : some stylized facts (English) Abstract. This article documents the main stylized features of macroeconomic fluctuations for 12 developing countries. It presents cross-correlations between domestic industrial output and a large group of macroeconomic variables, including fiscal variables, wages
14 Sep 2017 more volatile than income in emerging countries at business cycle fathom as the rural sector and informal sector, especially in emerging countries, are Boz et al. rely on search frictions and interest rate shocks to explain
Business Cycles, Informal Economy, and Interest Rates in Emerging Countries. SSRN Electronic Journal , CrossRef; Google Scholar and Talan, D. (2007) Employment dynamics: Small and large firms over the business cycle. Monthly Labor Review March, 39–50 Business Cycles, Informal Economy, and Interest Rates in Emerging Countries. SSRN Macroeconomic fluctuations in developing countries : some stylized facts (English) Abstract. This article documents the main stylized features of macroeconomic fluctuations for 12 developing countries. It presents cross-correlations between domestic industrial output and a large group of macroeconomic variables, including fiscal variables, wages interest rates and country risk that is consistent with our findings. In the closed economy literature, Cooley and Hansen (1989) and Christiano and Eichenbaum (1991) study the effect of a distortion very similar to ours on business cycles. informal economic activity in national accounts can translate into stronger variability in aggregate economic activity. JEL classifications: F41, F44 . Keywords: Emerging economies, Business cycles, Informal employment . 1 The paper is forthcoming in the ic Dynamics. An online version can be found at or interest rate shocks. Such frictions Business Cycles, Informal Economy, and Interest Rates in Emerging Countries. SSRN Electronic Journal , CrossRef; Google Scholar and Talan, D. (2007) Employment dynamics: Small and large firms over the business cycle. Monthly Labor Review March, 39–50 Business Cycles, Informal Economy, and Interest Rates in Emerging Countries. SSRN "Business Cycles in Emerging Economies:The Role of Interest Rates," Working Papers 01-12, New York University, Leonard N. Stern School of Business, Department of Economics. Pablo Neumeyer & Fabrizio Perri, 2004. "Business cycles in emerging economies: the role of interest rates," Staff Report 335, Federal Reserve Bank of Minneapolis. Summary: Emerging market countries have enjoyed an exceptionally favorable economic environment throughout 2004, 2005, and early 2006. In particular, accommodative U.S. monetary policy in recent years has helped create an environment of low interest rates in international capital markets.