Flexibility of Adjustment to Shocks: Economic Growth and Volatility of Middle-Income Countries Before and After the Global Financial Crisis of 2008
This paper analyzes the role of institutions and macroeconomic fundamentals on countries' adjustment to shocks especially for middle-income countries before and after the global financial crisis.
This paper examines how economic growth and growth volatility are associated with internal and external shocks, as well as shock spillovers from trade partners, taking into account the country’s economic institutions and fundamentals. It finds that the associations of growth, volatility, shocks, institutions, and macro fundamentals have changed in important ways after the recent global financial crisis. In particular, gross domestic product growth across countries has become more dependent on external factors, including global growth, global oil prices, and global financial volatility.
- Selective Literature Review
- Empirical Framework
- Empirical Results
- Concluding Observations