The Global Financial Crisis: An Anatomy of Global Growth

March 27, 2013

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Format: Chicago

Troy D Matheson. The Global Financial Crisis: An Anatomy of Global Growth, (USA: International Monetary Fund, 2013) accessed December 3, 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

The global financial crisis was a stark reminder of the importance of cross-country linkages in the global economy. We document growth synchronization across a diverse group of 185 countries covering 7 regions, and pay particular attention to the period around the global financial crisis. A dynamic factor model is used to decompose each country’s growth into contributions from global, regional, and idiosyncratic shocks. We find a high degree of global synchronization over 1990 to 2011, particularly across advanced economies. Examining the period around the global financial crisis, we find global shocks had large and widespread effects on growth, with more diversity in growth experiences in the early part of the recovery. In a recursive experiment, we find rising global growth synchronization just prior to the crisis, largely resulting from a shift in the importance of global shocks between countries. In contrast, the crisis period caused a much more widespread increase in growth synchronization, and was followed by a similarly pervasive decrease in synchronization in the early recovery.

Subject: Crisis resolution, Economic sectors, Financial crises, Global financial crisis of 2008-2009, Industrial sector, Potential output, Production

Keywords: Countries in Africa, Country's growth, Crisis period, Crisis resolution, East Africa, Financial Crisis, Global, Global financial crisis of 2008-2009, Globalization, Growth Synchronization, Industrial sector, Middle East, North Africa, Potential output, Simple time, Standard deviation, Sub-Saharan Africa, WEO estimate, WP

Publication Details

Pages:

40
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2013/076
Stock No:

WPIEA2013076
ISBN:

9781484362013
ISSN:

1018-5941

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