Macroeconomic Fluctuations in Developing Countries: Some Stylized Facts

By C. John McDermott, Eswar S Prasad, Pierre-Richard Agénor

March 1, 1999

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C. John McDermott, Eswar S Prasad, and Pierre-Richard Agénor. Macroeconomic Fluctuations in Developing Countries: Some Stylized Facts, (USA: International Monetary Fund, 1999) accessed December 26, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper documents the main stylized features of macroeconomic fluctuations for 12 developing countries. Cross-correlations between domestic industrial output and a large group of macroeconomic variables (including fiscal variables, wages, inflation, money, credit, trade, and exchange rates) are presented. Also analyzed are the effects of industrial country economic conditions on output fluctuations in these countries. The robustness of the results is examined using different detrending procedures. The results indicate many similarities between macroeconomic fluctuations in developing and industrial countries (procyclical real wages; countercyclical variation in government expenditure) and some important differences (countercyclical variation in the velocity of monetary aggregates).

Subject: Business cycles, Economic growth, Economic sectors, Foreign exchange, Industrial sector, Inflation, Labor, Prices, Real effective exchange rates, Real wages

Keywords: Business cycle fluctuation, Business Cycles, Correlation coefficient, Developing Countries, Equilibrium business cycle model, Fluctuations, HP filter, Industrial sector, Industrial sector output, Inflation, Output fluctuation, Output volatility, Positive correlation, Price level, Price-output correlation, Real effective exchange rates, Real wages, Sub-Saharan Africa, Terms of trade, Time series, WP

Publication Details

Pages:

45
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 1999/035
Stock No:

WPIEA0351999
ISBN:

9781451845334
ISSN:

1018-5941

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