The Cross-Country Incidence of the Global Crisis

By Gian M Milesi-Ferretti, Philip R. Lane

July 1, 2010

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Format: Chicago

Gian M Milesi-Ferretti, and Philip R. Lane The Cross-Country Incidence of the Global Crisis, (USA: International Monetary Fund, 2010) accessed November 8, 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

We examine whether the cross-country incidence and severity of the 2008-2009 global recession is systematically related to pre-crisis macroeconomic and financial factors. We find that the pre-crisis level of development, increases in the ratio of private credit to GDP, current account deficits, and openness to trade are helpful in understanding the intensity of the crisis. International risk sharing did little to shield domestic demand from the country-specific component of output declines, while those countries with large pre-crisis current account deficits saw domestic demand fall by much more than domestic output during the crisis.

Subject: Credit, Current account balance, Current account deficits, Financial crises, Production growth

Keywords: Crisis country, Demand growth, Dependent variable, Economic activity, Financial crisis, Foreign exchange, Real GDP, WP

Publication Details

Pages:

39
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2010/171
Stock No:

WPIEA2010171
ISBN:

9781455201822
ISSN:

1018-5941

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