The Impact of the Great Recession on Emerging Markets

By Ferhan Salman, Mali Chivakul, Ricardo Llaudes

October 1, 2010

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Format: Chicago

Ferhan Salman, Mali Chivakul, and Ricardo Llaudes. The Impact of the Great Recession on Emerging Markets, (USA: International Monetary Fund, 2010) accessed September 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 examines the impact of the recent global crisis on emerging market economies (EMs). Our cross-country analysis shows that the impact of the crisis was more pronounced in those EMs that had initial weaker fundamentals and greater financial and trade linkages. This effect is observed along a number of dimensions, such as growth, stock market performance, sovereign spreads, and credit growth. This paper also shows that during this crisis, pre-crisis reserve holdings helped to mitigate the initial growth collapse. This finding contrasts with other studies that fail to find a significant relationship between reserves and the growth decline. This paper argues that our preferred measure of impact is a more accurate reflection of the true impact of the crisis on EMs.

Subject: Credit, Early warning systems, Emerging and frontier financial markets, Financial crises, Stock markets

Keywords: Credit growth, Crisis, EMs, Short-term debt, Vulnerability EMs, WP

Publication Details

Pages:

34
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2010/237
Stock No:

WPIEA2010237
ISBN:

9781455209378
ISSN:

1018-5941

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