Finding a Balance between Growth and Vulnerability Trade-Offs : Lessons from Emerging Europe and the CIS
This paper examines the growth patterns of emerging Europe and the Commonwealth of Independent States (CIS) countries prior to the global financial crisis. The aim is to draw lessons on what policies can best position these countries going forward...
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| Format: | Policy Research Working Paper |
| Language: | English |
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2012
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| Online Access: | http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20110328114049 http://hdl.handle.net/10986/3380 |
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okr-10986-3380 |
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oai_dc |
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Digital Repository |
| institution_category |
Foreign Institution |
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Digital Repositories |
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World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
AGGREGATE DEMAND AMERICAN ECONOMIC REVIEW ASSET PRICES ASSETS BALANCE OF PAYMENTS BALANCE SHEET BALANCE SHEETS BANKING SECTOR BANKING SECTOR DEVELOPMENTS BROAD MONEY BUSINESS CYCLE CAPITAL ACCOUNT CAPITAL ACCOUNT LIBERALIZATION CAPITAL ACCOUNT OPENNESS CAPITAL CONTROLS CAPITAL FLOWS CAPITAL INFLOWS CAPITAL MARKET CAPITAL OUTFLOWS CAPITAL TRANSACTIONS CHECKS COLLATERAL COMMERCIAL BANKS CREDIT BOOM CREDIT BOOMS CREDIT GROWTH CURRENT ACCOUNT CURRENT ACCOUNT DEFICIT CURRENT ACCOUNT DEFICITS CYCLICAL FACTORS CYCLICAL FISCAL POLICY DEBT DATA DEBT RATIOS DEPENDENT VARIABLES DEPOSIT DESCRIPTIVE STATISTICS DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DIVERSIFICATION DOMESTIC CREDIT DOMESTIC DEMAND ECONOMETRIC EVIDENCE ECONOMIC ACTIVITY ECONOMIC CONDITIONS ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC OUTLOOK ECONOMIC OVERHEATING ECONOMIC POLICIES ECONOMIC SLOWDOWN ECONOMIC STRUCTURE EMERGING MARKETS EMPIRICAL REGULARITIES EMPIRICAL RESULTS ESTIMATED COEFFICIENT ESTIMATED COEFFICIENTS ESTIMATION RESULTS EXCHANGE ARRANGEMENTS EXCHANGE RATE EXCHANGE RATE ARRANGEMENTS EXCHANGE RATE FLEXIBILITY EXCHANGE RATE POLICIES EXCHANGE RATE REGIME EXCHANGE RATE REGIME CLASSIFICATION EXCHANGE RESTRICTIONS EXPERIENCE OF COUNTRIES EXPORT PERFORMANCE EXTERNAL ASSETS EXTERNAL DEBT EXTERNAL IMBALANCES EXTERNAL POSITIONS EXTERNAL SHORT-TERM DEBT EXTERNAL VULNERABILITY FINANCIAL CRISES FINANCIAL CRISIS FINANCIAL DEVELOPMENT FINANCIAL OPENNESS FINANCIAL SECTOR FINANCIAL VULNERABILITY FISCAL BALANCE FISCAL BALANCES FISCAL DEFICIT FISCAL DEFICITS FISCAL POLICIES FISCAL POLICY FLEXIBLE EXCHANGE RATES FOREIGN ASSETS FOREIGN DIRECT INVESTMENT FOREIGN EXCHANGE FOREIGN EXCHANGE RESERVE FOREIGN EXCHANGE RESERVES FOREIGN INVESTORS FOREIGN LIABILITIES FOREIGN RESERVES GDP GLOBAL CONDITIONS GLOBAL LIQUIDITY GLOBAL MARKETS GOVERNMENT EXPENDITURE GROSS DOMESTIC PRODUCT GROWTH DETERMINANTS GROWTH IMPACT GROWTH MODEL GROWTH RATE GROWTH RATES HIGH GROWTH HISTORY OF EXCHANGE RATE IMBALANCES IMPORT IMPORT GROWTH IMPORTS INCOME INCOME LEVEL INDEPENDENT VARIABLES INDIVIDUAL COUNTRIES INFLATION INTERNATIONAL BANK INTERNATIONAL MONETARY FUND INVESTMENT RISKS LEVEL OF DEVELOPMENT LEVEL OF INCOME LIQUIDITY LOAN LOCAL CURRENCY MACROECONOMIC MANAGEMENT MACROECONOMIC OVERHEATING MARKET UNCERTAINTY MARKET VOLATILITY MATURITY MONETARY CONDITIONS MONETARY FUND MONETARY POLICIES MONETARY POLICY NATIONAL BANK NEGATIVE IMPACT NEGATIVE IMPACT ON GROWTH NOMINAL EXCHANGE RATE OIL PRICES OVERVALUATION POLICY ANALYSIS POLICY MAKERS POLICY RESEARCH POLICY VARIABLES POVERTY REDUCTION PRIVATE LOAN PRIVATE SECTOR PRIVATE SECTOR CREDIT PRODUCTIVE INVESTMENTS PUBLIC EXPENDITURE PUBLIC FINANCES PUSH FACTORS RAPID GROWTH REAL EFFECTIVE EXCHANGE RATE REAL EXCHANGE RATE REAL EXCHANGE RATE OVERVALUATION REAL GDP REAL INTEREST REAL INTEREST RATES RECESSION RECESSIONS REGRESSION ANALYSIS RELATIVE IMPORTANCE RISK AVERSION SHORT TERM DEBT SHORT-TERM DEBT STANDARD DEVIATION STANDARD ERRORS STRUCTURAL POLICIES TOTAL EXPORTS TRADE BALANCE TRADE OPENNESS TRANSITION COUNTRIES TRANSITION PATH TROUGH UNCERTAINTY UPWARD PRESSURES VOLATILITY |
| spellingShingle |
AGGREGATE DEMAND AMERICAN ECONOMIC REVIEW ASSET PRICES ASSETS BALANCE OF PAYMENTS BALANCE SHEET BALANCE SHEETS BANKING SECTOR BANKING SECTOR DEVELOPMENTS BROAD MONEY BUSINESS CYCLE CAPITAL ACCOUNT CAPITAL ACCOUNT LIBERALIZATION CAPITAL ACCOUNT OPENNESS CAPITAL CONTROLS CAPITAL FLOWS CAPITAL INFLOWS CAPITAL MARKET CAPITAL OUTFLOWS CAPITAL TRANSACTIONS CHECKS COLLATERAL COMMERCIAL BANKS CREDIT BOOM CREDIT BOOMS CREDIT GROWTH CURRENT ACCOUNT CURRENT ACCOUNT DEFICIT CURRENT ACCOUNT DEFICITS CYCLICAL FACTORS CYCLICAL FISCAL POLICY DEBT DATA DEBT RATIOS DEPENDENT VARIABLES DEPOSIT DESCRIPTIVE STATISTICS DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DIVERSIFICATION DOMESTIC CREDIT DOMESTIC DEMAND ECONOMETRIC EVIDENCE ECONOMIC ACTIVITY ECONOMIC CONDITIONS ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC OUTLOOK ECONOMIC OVERHEATING ECONOMIC POLICIES ECONOMIC SLOWDOWN ECONOMIC STRUCTURE EMERGING MARKETS EMPIRICAL REGULARITIES EMPIRICAL RESULTS ESTIMATED COEFFICIENT ESTIMATED COEFFICIENTS ESTIMATION RESULTS EXCHANGE ARRANGEMENTS EXCHANGE RATE EXCHANGE RATE ARRANGEMENTS EXCHANGE RATE FLEXIBILITY EXCHANGE RATE POLICIES EXCHANGE RATE REGIME EXCHANGE RATE REGIME CLASSIFICATION EXCHANGE RESTRICTIONS EXPERIENCE OF COUNTRIES EXPORT PERFORMANCE EXTERNAL ASSETS EXTERNAL DEBT EXTERNAL IMBALANCES EXTERNAL POSITIONS EXTERNAL SHORT-TERM DEBT EXTERNAL VULNERABILITY FINANCIAL CRISES FINANCIAL CRISIS FINANCIAL DEVELOPMENT FINANCIAL OPENNESS FINANCIAL SECTOR FINANCIAL VULNERABILITY FISCAL BALANCE FISCAL BALANCES FISCAL DEFICIT FISCAL DEFICITS FISCAL POLICIES FISCAL POLICY FLEXIBLE EXCHANGE RATES FOREIGN ASSETS FOREIGN DIRECT INVESTMENT FOREIGN EXCHANGE FOREIGN EXCHANGE RESERVE FOREIGN EXCHANGE RESERVES FOREIGN INVESTORS FOREIGN LIABILITIES FOREIGN RESERVES GDP GLOBAL CONDITIONS GLOBAL LIQUIDITY GLOBAL MARKETS GOVERNMENT EXPENDITURE GROSS DOMESTIC PRODUCT GROWTH DETERMINANTS GROWTH IMPACT GROWTH MODEL GROWTH RATE GROWTH RATES HIGH GROWTH HISTORY OF EXCHANGE RATE IMBALANCES IMPORT IMPORT GROWTH IMPORTS INCOME INCOME LEVEL INDEPENDENT VARIABLES INDIVIDUAL COUNTRIES INFLATION INTERNATIONAL BANK INTERNATIONAL MONETARY FUND INVESTMENT RISKS LEVEL OF DEVELOPMENT LEVEL OF INCOME LIQUIDITY LOAN LOCAL CURRENCY MACROECONOMIC MANAGEMENT MACROECONOMIC OVERHEATING MARKET UNCERTAINTY MARKET VOLATILITY MATURITY MONETARY CONDITIONS MONETARY FUND MONETARY POLICIES MONETARY POLICY NATIONAL BANK NEGATIVE IMPACT NEGATIVE IMPACT ON GROWTH NOMINAL EXCHANGE RATE OIL PRICES OVERVALUATION POLICY ANALYSIS POLICY MAKERS POLICY RESEARCH POLICY VARIABLES POVERTY REDUCTION PRIVATE LOAN PRIVATE SECTOR PRIVATE SECTOR CREDIT PRODUCTIVE INVESTMENTS PUBLIC EXPENDITURE PUBLIC FINANCES PUSH FACTORS RAPID GROWTH REAL EFFECTIVE EXCHANGE RATE REAL EXCHANGE RATE REAL EXCHANGE RATE OVERVALUATION REAL GDP REAL INTEREST REAL INTEREST RATES RECESSION RECESSIONS REGRESSION ANALYSIS RELATIVE IMPORTANCE RISK AVERSION SHORT TERM DEBT SHORT-TERM DEBT STANDARD DEVIATION STANDARD ERRORS STRUCTURAL POLICIES TOTAL EXPORTS TRADE BALANCE TRADE OPENNESS TRANSITION COUNTRIES TRANSITION PATH TROUGH UNCERTAINTY UPWARD PRESSURES VOLATILITY Ghosh, Swati Sugawara, Naotaka Zalduendo, Juan Finding a Balance between Growth and Vulnerability Trade-Offs : Lessons from Emerging Europe and the CIS |
| geographic_facet |
Europe and Central Asia Europe and Central Asia |
| relation |
Policy Research working paper ; no. WPS 5592 |
| description |
This paper examines the growth patterns
of emerging Europe and the Commonwealth of Independent
States (CIS) countries prior to the global financial crisis.
The aim is to draw lessons on what policies can best
position these countries going forward to enjoy growth
without a buildup in macro and financial vulnerability.
Cluster analysis is used to classify these countries across
the growth and vulnerability dimensions; namely, a
classification into low or high growth outcomes, each of
which may occur with low or high vulnerability features. The
vulnerability indicators used are multifaceted, covering
both the domestic and the external dimensions that have been
identified in previous studies as being good indicators of
likelihood of crisis -- itself understood as
multidimensional. Based on multinomial logit regressions,
the initial conditions and the economic policies that might
affect the probabilities of being in each of the four
possible cluster combinations are examined. Many (if not
most) of the countries in the sample experienced very large
capital inflows relative to their gross domestic product
prior to the crisis, which can complicate macroeconomic
management and lead to a buildup of vulnerability. These
large inflows were partly due to the high liquidity in
global markets and, at least for some countries in the
country sample, the particular attractiveness of "new
Europe and emerging countries in the region" in the
eyes of foreign investors. Nonetheless, the analysis finds
strong evidence that the macroeconomic and structural
policies that over time influence the structure of the
economy, can play a significant role in explaining (and,
going forward, in influencing) the different growth and
vulnerability patterns experienced by the countries covered
in this paper. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Ghosh, Swati Sugawara, Naotaka Zalduendo, Juan |
| author_facet |
Ghosh, Swati Sugawara, Naotaka Zalduendo, Juan |
| author_sort |
Ghosh, Swati |
| title |
Finding a Balance between Growth and Vulnerability Trade-Offs : Lessons from Emerging Europe and the CIS |
| title_short |
Finding a Balance between Growth and Vulnerability Trade-Offs : Lessons from Emerging Europe and the CIS |
| title_full |
Finding a Balance between Growth and Vulnerability Trade-Offs : Lessons from Emerging Europe and the CIS |
| title_fullStr |
Finding a Balance between Growth and Vulnerability Trade-Offs : Lessons from Emerging Europe and the CIS |
| title_full_unstemmed |
Finding a Balance between Growth and Vulnerability Trade-Offs : Lessons from Emerging Europe and the CIS |
| title_sort |
finding a balance between growth and vulnerability trade-offs : lessons from emerging europe and the cis |
| publishDate |
2012 |
| url |
http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20110328114049 http://hdl.handle.net/10986/3380 |
| _version_ |
1764386888818360320 |
| spelling |
okr-10986-33802021-04-23T14:02:09Z Finding a Balance between Growth and Vulnerability Trade-Offs : Lessons from Emerging Europe and the CIS Ghosh, Swati Sugawara, Naotaka Zalduendo, Juan AGGREGATE DEMAND AMERICAN ECONOMIC REVIEW ASSET PRICES ASSETS BALANCE OF PAYMENTS BALANCE SHEET BALANCE SHEETS BANKING SECTOR BANKING SECTOR DEVELOPMENTS BROAD MONEY BUSINESS CYCLE CAPITAL ACCOUNT CAPITAL ACCOUNT LIBERALIZATION CAPITAL ACCOUNT OPENNESS CAPITAL CONTROLS CAPITAL FLOWS CAPITAL INFLOWS CAPITAL MARKET CAPITAL OUTFLOWS CAPITAL TRANSACTIONS CHECKS COLLATERAL COMMERCIAL BANKS CREDIT BOOM CREDIT BOOMS CREDIT GROWTH CURRENT ACCOUNT CURRENT ACCOUNT DEFICIT CURRENT ACCOUNT DEFICITS CYCLICAL FACTORS CYCLICAL FISCAL POLICY DEBT DATA DEBT RATIOS DEPENDENT VARIABLES DEPOSIT DESCRIPTIVE STATISTICS DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DIVERSIFICATION DOMESTIC CREDIT DOMESTIC DEMAND ECONOMETRIC EVIDENCE ECONOMIC ACTIVITY ECONOMIC CONDITIONS ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC OUTLOOK ECONOMIC OVERHEATING ECONOMIC POLICIES ECONOMIC SLOWDOWN ECONOMIC STRUCTURE EMERGING MARKETS EMPIRICAL REGULARITIES EMPIRICAL RESULTS ESTIMATED COEFFICIENT ESTIMATED COEFFICIENTS ESTIMATION RESULTS EXCHANGE ARRANGEMENTS EXCHANGE RATE EXCHANGE RATE ARRANGEMENTS EXCHANGE RATE FLEXIBILITY EXCHANGE RATE POLICIES EXCHANGE RATE REGIME EXCHANGE RATE REGIME CLASSIFICATION EXCHANGE RESTRICTIONS EXPERIENCE OF COUNTRIES EXPORT PERFORMANCE EXTERNAL ASSETS EXTERNAL DEBT EXTERNAL IMBALANCES EXTERNAL POSITIONS EXTERNAL SHORT-TERM DEBT EXTERNAL VULNERABILITY FINANCIAL CRISES FINANCIAL CRISIS FINANCIAL DEVELOPMENT FINANCIAL OPENNESS FINANCIAL SECTOR FINANCIAL VULNERABILITY FISCAL BALANCE FISCAL BALANCES FISCAL DEFICIT FISCAL DEFICITS FISCAL POLICIES FISCAL POLICY FLEXIBLE EXCHANGE RATES FOREIGN ASSETS FOREIGN DIRECT INVESTMENT FOREIGN EXCHANGE FOREIGN EXCHANGE RESERVE FOREIGN EXCHANGE RESERVES FOREIGN INVESTORS FOREIGN LIABILITIES FOREIGN RESERVES GDP GLOBAL CONDITIONS GLOBAL LIQUIDITY GLOBAL MARKETS GOVERNMENT EXPENDITURE GROSS DOMESTIC PRODUCT GROWTH DETERMINANTS GROWTH IMPACT GROWTH MODEL GROWTH RATE GROWTH RATES HIGH GROWTH HISTORY OF EXCHANGE RATE IMBALANCES IMPORT IMPORT GROWTH IMPORTS INCOME INCOME LEVEL INDEPENDENT VARIABLES INDIVIDUAL COUNTRIES INFLATION INTERNATIONAL BANK INTERNATIONAL MONETARY FUND INVESTMENT RISKS LEVEL OF DEVELOPMENT LEVEL OF INCOME LIQUIDITY LOAN LOCAL CURRENCY MACROECONOMIC MANAGEMENT MACROECONOMIC OVERHEATING MARKET UNCERTAINTY MARKET VOLATILITY MATURITY MONETARY CONDITIONS MONETARY FUND MONETARY POLICIES MONETARY POLICY NATIONAL BANK NEGATIVE IMPACT NEGATIVE IMPACT ON GROWTH NOMINAL EXCHANGE RATE OIL PRICES OVERVALUATION POLICY ANALYSIS POLICY MAKERS POLICY RESEARCH POLICY VARIABLES POVERTY REDUCTION PRIVATE LOAN PRIVATE SECTOR PRIVATE SECTOR CREDIT PRODUCTIVE INVESTMENTS PUBLIC EXPENDITURE PUBLIC FINANCES PUSH FACTORS RAPID GROWTH REAL EFFECTIVE EXCHANGE RATE REAL EXCHANGE RATE REAL EXCHANGE RATE OVERVALUATION REAL GDP REAL INTEREST REAL INTEREST RATES RECESSION RECESSIONS REGRESSION ANALYSIS RELATIVE IMPORTANCE RISK AVERSION SHORT TERM DEBT SHORT-TERM DEBT STANDARD DEVIATION STANDARD ERRORS STRUCTURAL POLICIES TOTAL EXPORTS TRADE BALANCE TRADE OPENNESS TRANSITION COUNTRIES TRANSITION PATH TROUGH UNCERTAINTY UPWARD PRESSURES VOLATILITY This paper examines the growth patterns of emerging Europe and the Commonwealth of Independent States (CIS) countries prior to the global financial crisis. The aim is to draw lessons on what policies can best position these countries going forward to enjoy growth without a buildup in macro and financial vulnerability. Cluster analysis is used to classify these countries across the growth and vulnerability dimensions; namely, a classification into low or high growth outcomes, each of which may occur with low or high vulnerability features. The vulnerability indicators used are multifaceted, covering both the domestic and the external dimensions that have been identified in previous studies as being good indicators of likelihood of crisis -- itself understood as multidimensional. Based on multinomial logit regressions, the initial conditions and the economic policies that might affect the probabilities of being in each of the four possible cluster combinations are examined. Many (if not most) of the countries in the sample experienced very large capital inflows relative to their gross domestic product prior to the crisis, which can complicate macroeconomic management and lead to a buildup of vulnerability. These large inflows were partly due to the high liquidity in global markets and, at least for some countries in the country sample, the particular attractiveness of "new Europe and emerging countries in the region" in the eyes of foreign investors. Nonetheless, the analysis finds strong evidence that the macroeconomic and structural policies that over time influence the structure of the economy, can play a significant role in explaining (and, going forward, in influencing) the different growth and vulnerability patterns experienced by the countries covered in this paper. 2012-03-19T18:01:26Z 2012-03-19T18:01:26Z 2011-03-01 http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20110328114049 http://hdl.handle.net/10986/3380 English Policy Research working paper ; no. WPS 5592 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank Publications & Research :: Policy Research Working Paper Europe and Central Asia Europe and Central Asia |