All of Scioteca
Communities & Collections By Issue Date Authors Titles Subjects Country / Region
Profiles
Our Authors
My Account
Login

Business Cycles in Emerging Markets: the Role of Durable Goods and Financial Frictions

There is a growing literature studying business cycles in emerging economies. This paper contributes to this literature by examining how durable goods and financial frictions shape cyclical fluctuations in a small open economy subject to transitory and permanent shocks. We find that permanent shocks play a less important role driving the cycle in emerging economies than previously documented. We also find that financial frictions are crucial to explain some key business cycle properties of these economies. In our quantitative model, a countercyclical borrowing premium interacts with the purchase of durables to deliver highly volatile consumption and strongly countercyclical net exports.

Abstract

Description

Subject

Sector financiero | Economía | Investigación socioeconómica

País / Región

URI

https://scioteca.caf.com/handle/123456789/243

Date

2012

Cite from this publication

Collections

6.1 Documentos de trabajo en investigación socioeconómica

Endorsement

Review

Supplemented By

Referenced By

Creative Commons license

CC-BY-NC
Except where otherwised noted, this item's license is described as CC-BY-NC
Thumbnail Image

Files

Business_Cycles_in_Emerging_Markets_the_Role_of_Durable_Goods_and_Financial_Frictions.pdf (420.81 KB)

Authors

Journal Title

Journal ISSN

Volume Title

Publisher

CAF

Related Items

Thumbnail Image
Informality and Productivity: The Role of Unemployment Insurance Schemes

We study the design of optimal unemployment protection schemes to evaluate its impact on labor markets, welfare and productivity. We consider a life-cycle economies with...

Thumbnail Image
RED 2018: Institutions for productivity: towards a better business environment

In the last decades, many countries in Latin America have experienced a shift in policies towards the pursuit of common objectives that can be deemed...

Thumbnail Image
Annual Report 2007

For the fifth consecutive year, Latin America exhibited a highly satisfactory economic behavior, as shown by the main performance ratios, notwithstanding the downfall in the...

Thumbnail Image
The Life-cycle Growth of Plants in Colombia: Fundamentals vs. Distortions

We take advantage of rich microdata on Colombian manufacturing establishments to decompose growth over an establishment’s life cycle into that attributable to fundamental sources of...

Thumbnail Image
CAF's Impact Measurement and Management Approach

The publication "CAF's Impact Management and Measurement Approach 2025" presents the strategic framework to evaluate and enhance contributions to sustainable development in Latin America and...

Thumbnail Image
More to Live for: Health Investment Responses to Expected Retirement Wealth in Chile

A poorly understood but important way that economic conditions influence health is through the incentives that they create for health investments. In this paper, we...