Characterizing Business Cycles in Small Economies

Characterizing Business Cycles in Small Economies

This paper aims to document a set of stylized facts characterizing business cycle dynamics in smaller economies. The paper uses a large sample of countries spanning 1960-2014 to show that country size is a significant factor affecting countries...

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Main Authors: Hnatkovska, Viktoria, Koehler-Geib, Fritzi
Format: Working Paper
Language:English
Published: World Bank, Washington, DC 2018
Subjects:
BUSINESS CYCLES
SMALL STATES
VOLATILITY
FISCAL POLICY
FISCAL RULES
EXCHANGE RATES
EXPORT COMPETITIVENESS
Online Access:http://documents.worldbank.org/curated/en/556931531406770669/Characterizing-business-cycles-in-small-economies
http://hdl.handle.net/10986/30000
id okr-10986-30000
recordtype oai_dc
spelling okr-10986-300002021-06-08T14:42:46Z Characterizing Business Cycles in Small Economies Hnatkovska, Viktoria Koehler-Geib, Fritzi BUSINESS CYCLES SMALL STATES VOLATILITY FISCAL POLICY FISCAL RULES EXCHANGE RATES EXPORT COMPETITIVENESS This paper aims to document a set of stylized facts characterizing business cycle dynamics in smaller economies. The paper uses a large sample of countries spanning 1960-2014 to show that country size is a significant factor affecting countries' volatility, comovement with gross domestic product and real interest rate, and persistence. Specifically, analysis finds that smaller countries (i) tend to have more volatile gross domestic product; (ii) have more volatile, less procyclical, and less persistent investment; (iii) exhibit more volatile trade balance and current account, have more procyclical exports, and thus less countercyclical trade balance; (iv) have more volatile government consumption and more procyclical public revenues and fiscal balance; and (v) possess more procyclical inflation. The effects of country size remain robust even after we control for the level of economic and institutional development, the presence of fiscal rule(s) and fixed exchange rates, and the commodity exporting status. 2018-07-16T15:16:32Z 2018-07-16T15:16:32Z 2018-07 Working Paper http://documents.worldbank.org/curated/en/556931531406770669/Characterizing-business-cycles-in-small-economies http://hdl.handle.net/10986/30000 English Policy Research Working Paper;No. 8527 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper
repository_type Digital Repository
institution_category Foreign Institution
institution Digital Repositories
building World Bank Open Knowledge Repository
collection World Bank
language English
topic BUSINESS CYCLES
SMALL STATES
VOLATILITY
FISCAL POLICY
FISCAL RULES
EXCHANGE RATES
EXPORT COMPETITIVENESS
spellingShingle BUSINESS CYCLES
SMALL STATES
VOLATILITY
FISCAL POLICY
FISCAL RULES
EXCHANGE RATES
EXPORT COMPETITIVENESS
Hnatkovska, Viktoria
Koehler-Geib, Fritzi
Characterizing Business Cycles in Small Economies
relation Policy Research Working Paper;No. 8527
description This paper aims to document a set of stylized facts characterizing business cycle dynamics in smaller economies. The paper uses a large sample of countries spanning 1960-2014 to show that country size is a significant factor affecting countries' volatility, comovement with gross domestic product and real interest rate, and persistence. Specifically, analysis finds that smaller countries (i) tend to have more volatile gross domestic product; (ii) have more volatile, less procyclical, and less persistent investment; (iii) exhibit more volatile trade balance and current account, have more procyclical exports, and thus less countercyclical trade balance; (iv) have more volatile government consumption and more procyclical public revenues and fiscal balance; and (v) possess more procyclical inflation. The effects of country size remain robust even after we control for the level of economic and institutional development, the presence of fiscal rule(s) and fixed exchange rates, and the commodity exporting status.
format Working Paper
author Hnatkovska, Viktoria
Koehler-Geib, Fritzi
author_facet Hnatkovska, Viktoria
Koehler-Geib, Fritzi
author_sort Hnatkovska, Viktoria
title Characterizing Business Cycles in Small Economies
title_short Characterizing Business Cycles in Small Economies
title_full Characterizing Business Cycles in Small Economies
title_fullStr Characterizing Business Cycles in Small Economies
title_full_unstemmed Characterizing Business Cycles in Small Economies
title_sort characterizing business cycles in small economies
publisher World Bank, Washington, DC
publishDate 2018
url http://documents.worldbank.org/curated/en/556931531406770669/Characterizing-business-cycles-in-small-economies
http://hdl.handle.net/10986/30000
_version_ 1764471022515388416

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