IMF Working Papers

Domestic Amplifiers of External Shocks: Growth Accelerations and Reversals in Emerging Market and Developing Economies

By Bertrand Gruss, Malhar S Nabar, Marcos Poplawski Ribeiro

June 17, 2019

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Bertrand Gruss, Malhar S Nabar, and Marcos Poplawski Ribeiro. Domestic Amplifiers of External Shocks: Growth Accelerations and Reversals in Emerging Market and Developing Economies, (USA: International Monetary Fund, 2019) accessed December 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

External conditions have been found to influence the tendency of emerging market and developing economies to experience episodes of growth accelerations and reversals. In this paper we study the role of domestic policies and other structural attributes in amplifying or mitigating the effect that shifts in external conditions have on growth patterns in emerging market and developing economies over the past five decades. We find that these economies can enhance the growth impulse from external conditions by strengthening their institutional frameworks and adopting a policy mix that protects trade integration; permits exchange rate flexibility; and ensures that vulnerabilities stemming from high current account deficits and external debt, as well as high public debt, are contained.

Subject: Capital account, Current account balance, Exchange rate flexibility, External debt, Public debt

Keywords: Domestic policy, Terms of trade, WP

Publication Details

  • Pages:

    27

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 2019/128

  • Stock No:

    WPIEA2019128

  • ISBN:

    9781498314435

  • ISSN:

    1018-5941

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