Managing East Asia's Macroeconomic Volatility
East Asia has experienced a dramatic decrease in output growth volatility over the past 20 years. This is good news, as output growth volatility affects poor households because of coping strategies that have long-term, harmful consequences, and the...
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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_20090706140259 http://hdl.handle.net/10986/4180 |
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okr-10986-4180 |
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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 |
ADVERSE EFFECTS AGGREGATE OUTPUT ALLOCATION OF RESOURCES AMERICAN ECONOMIC REVIEW ASSETS AVERAGE GROWTH AVERAGE GROWTH RATE AVERAGE LEVEL BANK SUPERVISION BANKING BANKING CRISIS BANKRUPTCY BOND BORROWERS BUSINESS CYCLE BUSINESS CYCLES BUSINESS PRACTICES CAPITA GROWTH CAPITAL FLOWS CAPITAL INFLOWS CENTRAL BANK CENTRAL BANKS COMMODITY COMMODITY PRICES COMPARATIVE ADVANTAGE CONSUMER PRICE CONSUMER PRICE INDEX CONSUMPTION GROWTH CONSUMPTION VOLATILITY CREDITOR CRISIS CRISIS VOLATILITY CROSS COUNTRY CROSS COUNTRY EVIDENCE CYCLICAL FISCAL POLICY CYCLICAL VOLATILITY DEPENDENT VARIABLE DEPOSIT DEPOSIT INSURANCE DEVELOPING COUNTRIES DEVELOPMENT ECONOMICS DISCRETIONARY POLICIES DIVERSIFICATION DOMESTIC CREDIT DUTCH DISEASE DYNAMIC PANEL EARNINGS ECONOMETRIC EVIDENCE ECONOMIC ACTIVITY ECONOMIC CRISES ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC MODELS ECONOMIC OUTLOOK ECONOMIC PERFORMANCE ECONOMIC POLICY ECONOMIC SHOCKS ECONOMIC UNCERTAINTY EFFECT OF RECESSIONS EMERGING ECONOMIES EMERGING MARKET EMERGING MARKET BUSINESS EMERGING MARKETS EQUITY ERROR TERM ESTIMATED REDUCTION ESTIMATION METHOD EXCHANGE EXCHANGE RATE EXOGENOUS SHOCKS EXPLANATORY VARIABLES EXTERNAL CONDITIONS EXTERNAL FACTORS EXTERNAL SHOCK EXTERNAL SHOCKS EXTERNAL VULNERABILITY FEDERAL RESERVE FINANCIAL CRISIS FINANCIAL DEPTH FINANCIAL DEVELOPMENT FINANCIAL FLOWS FINANCIAL INSTITUTIONS FINANCIAL MARKETS FINANCIAL OPENNESS FINANCIAL STABILITY FISCAL CONSOLIDATIONS FISCAL MANAGEMENT FISCAL POLICIES FISCAL POLICY FLUCTUATIONS FOREIGN CAPITAL FOREIGN DIRECT INVESTMENTS FUTURE GLOBAL BUSINESS GLOBAL ECONOMY GLOBALIZATION GOVERNMENT CONSUMPTION GOVERNMENT SPENDING GROWTH GROWTH PERFORMANCE GROWTH RATE GROWTH RATES GROWTH REGRESSION GROWTH VOLATILITY HIGH INCOME HIGH TRADE OPENNESS HIGH VOLATILITY HIGH-INCOME COUNTRIES HIGHER VOLATILITY HOUSEHOLD WELFARE IMPACT OF SHOCKS INCOME INCOME RISK INFLATION INFLATION EXPECTATIONS INFLATION RATE INFLATION TARGETING INFLATION VOLATILITY INTERACTION TERMS INTEREST INTEREST RATE INTEREST RATE SHOCKS INTEREST RATES INTERNATIONAL INTEREST INTERNATIONAL INTEREST RATES INTERNATIONAL MONETARY FUND INTERNATIONAL PRICES INTERNATIONAL RESERVES INVESTMENT INVESTORS LABOR MARKET LAGGED DEPENDENT LAGGED LEVELS LAGGED VALUES LENDER OF LAST RESORT LEVERAGE LIBERALIZATION LINK BETWEEN VOLATILITY LIQUIDITY LIQUIDITY CRISES LOW INCOME LOW INCOME COUNTRIES LOW-INCOME COUNTRIES MACROECONOMIC FLUCTUATIONS MACROECONOMIC MANAGEMENT MACROECONOMIC POLICIES MACROECONOMIC STABILITY MACROECONOMIC VOLATILITY MACROECONOMICS MEDIUM TERM MIDDLE INCOME MIDDLE INCOME COUNTRIES MIDDLE-INCOME COUNTRIES MONETARY ECONOMICS MONETARY POLICIES MONETARY POLICY MONETARY RESEARCH MONEY NATURAL DISASTERS NEGATIVE EFFECT NEGATIVE IMPACT 0 HYPOTHESIS OPEN ECONOMIES OPEN ECONOMY OUTPUT OUTPUT GROWTH OUTPUT VOLATILITY OVERALL VOLATILITY PER CAPITA GROWTH POLICY MAKERS POLICY RESEARCH POLITICAL ECONOMY POLITICAL POWER POLITICAL REGIME POOR COUNTRIES POOR HOUSEHOLDS POVERTY PRICES PRIVATE SECTOR PRODUCTION STRUCTURE PRUDENTIAL SUPERVISION RATE OF GROWTH RECESSIONS REVERSE CAUSATION REVIEW OF ECONOMICS RISK SHARING ROBUSTNESS CHECK SAFETY NETS SCATTER PLOT SERIAL CORRELATION SHARE SIGNIFICANT EFFECT SIGNIFICANT IMPACT SOCIAL PROTECTION STABILIZATION STABLE GROWTH STABLE INFLATION STANDARD DEVIATION SUM OF IMPORTS TAX TAX BASE VARIABILITY TERMS OF TRADE TRADE TRADE GROWTH TRADE SHOCKS TRADE VOLUMES TRADING PARTNERS UPWARD PRESSURE VOLATILITIES VOLATILITY MEASURES VOLATILITY OF INFLATION VOLATILITY OF TERMS OF TRADE SHOCKS WEIGHTS WORLD DEVELOPMENT INDICATORS WORLD ECONOMY |
| spellingShingle |
ADVERSE EFFECTS AGGREGATE OUTPUT ALLOCATION OF RESOURCES AMERICAN ECONOMIC REVIEW ASSETS AVERAGE GROWTH AVERAGE GROWTH RATE AVERAGE LEVEL BANK SUPERVISION BANKING BANKING CRISIS BANKRUPTCY BOND BORROWERS BUSINESS CYCLE BUSINESS CYCLES BUSINESS PRACTICES CAPITA GROWTH CAPITAL FLOWS CAPITAL INFLOWS CENTRAL BANK CENTRAL BANKS COMMODITY COMMODITY PRICES COMPARATIVE ADVANTAGE CONSUMER PRICE CONSUMER PRICE INDEX CONSUMPTION GROWTH CONSUMPTION VOLATILITY CREDITOR CRISIS CRISIS VOLATILITY CROSS COUNTRY CROSS COUNTRY EVIDENCE CYCLICAL FISCAL POLICY CYCLICAL VOLATILITY DEPENDENT VARIABLE DEPOSIT DEPOSIT INSURANCE DEVELOPING COUNTRIES DEVELOPMENT ECONOMICS DISCRETIONARY POLICIES DIVERSIFICATION DOMESTIC CREDIT DUTCH DISEASE DYNAMIC PANEL EARNINGS ECONOMETRIC EVIDENCE ECONOMIC ACTIVITY ECONOMIC CRISES ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC MODELS ECONOMIC OUTLOOK ECONOMIC PERFORMANCE ECONOMIC POLICY ECONOMIC SHOCKS ECONOMIC UNCERTAINTY EFFECT OF RECESSIONS EMERGING ECONOMIES EMERGING MARKET EMERGING MARKET BUSINESS EMERGING MARKETS EQUITY ERROR TERM ESTIMATED REDUCTION ESTIMATION METHOD EXCHANGE EXCHANGE RATE EXOGENOUS SHOCKS EXPLANATORY VARIABLES EXTERNAL CONDITIONS EXTERNAL FACTORS EXTERNAL SHOCK EXTERNAL SHOCKS EXTERNAL VULNERABILITY FEDERAL RESERVE FINANCIAL CRISIS FINANCIAL DEPTH FINANCIAL DEVELOPMENT FINANCIAL FLOWS FINANCIAL INSTITUTIONS FINANCIAL MARKETS FINANCIAL OPENNESS FINANCIAL STABILITY FISCAL CONSOLIDATIONS FISCAL MANAGEMENT FISCAL POLICIES FISCAL POLICY FLUCTUATIONS FOREIGN CAPITAL FOREIGN DIRECT INVESTMENTS FUTURE GLOBAL BUSINESS GLOBAL ECONOMY GLOBALIZATION GOVERNMENT CONSUMPTION GOVERNMENT SPENDING GROWTH GROWTH PERFORMANCE GROWTH RATE GROWTH RATES GROWTH REGRESSION GROWTH VOLATILITY HIGH INCOME HIGH TRADE OPENNESS HIGH VOLATILITY HIGH-INCOME COUNTRIES HIGHER VOLATILITY HOUSEHOLD WELFARE IMPACT OF SHOCKS INCOME INCOME RISK INFLATION INFLATION EXPECTATIONS INFLATION RATE INFLATION TARGETING INFLATION VOLATILITY INTERACTION TERMS INTEREST INTEREST RATE INTEREST RATE SHOCKS INTEREST RATES INTERNATIONAL INTEREST INTERNATIONAL INTEREST RATES INTERNATIONAL MONETARY FUND INTERNATIONAL PRICES INTERNATIONAL RESERVES INVESTMENT INVESTORS LABOR MARKET LAGGED DEPENDENT LAGGED LEVELS LAGGED VALUES LENDER OF LAST RESORT LEVERAGE LIBERALIZATION LINK BETWEEN VOLATILITY LIQUIDITY LIQUIDITY CRISES LOW INCOME LOW INCOME COUNTRIES LOW-INCOME COUNTRIES MACROECONOMIC FLUCTUATIONS MACROECONOMIC MANAGEMENT MACROECONOMIC POLICIES MACROECONOMIC STABILITY MACROECONOMIC VOLATILITY MACROECONOMICS MEDIUM TERM MIDDLE INCOME MIDDLE INCOME COUNTRIES MIDDLE-INCOME COUNTRIES MONETARY ECONOMICS MONETARY POLICIES MONETARY POLICY MONETARY RESEARCH MONEY NATURAL DISASTERS NEGATIVE EFFECT NEGATIVE IMPACT 0 HYPOTHESIS OPEN ECONOMIES OPEN ECONOMY OUTPUT OUTPUT GROWTH OUTPUT VOLATILITY OVERALL VOLATILITY PER CAPITA GROWTH POLICY MAKERS POLICY RESEARCH POLITICAL ECONOMY POLITICAL POWER POLITICAL REGIME POOR COUNTRIES POOR HOUSEHOLDS POVERTY PRICES PRIVATE SECTOR PRODUCTION STRUCTURE PRUDENTIAL SUPERVISION RATE OF GROWTH RECESSIONS REVERSE CAUSATION REVIEW OF ECONOMICS RISK SHARING ROBUSTNESS CHECK SAFETY NETS SCATTER PLOT SERIAL CORRELATION SHARE SIGNIFICANT EFFECT SIGNIFICANT IMPACT SOCIAL PROTECTION STABILIZATION STABLE GROWTH STABLE INFLATION STANDARD DEVIATION SUM OF IMPORTS TAX TAX BASE VARIABILITY TERMS OF TRADE TRADE TRADE GROWTH TRADE SHOCKS TRADE VOLUMES TRADING PARTNERS UPWARD PRESSURE VOLATILITIES VOLATILITY MEASURES VOLATILITY OF INFLATION VOLATILITY OF TERMS OF TRADE SHOCKS WEIGHTS WORLD DEVELOPMENT INDICATORS WORLD ECONOMY Olaberria, Eduardo Rigolini, Jamele Managing East Asia's Macroeconomic Volatility |
| geographic_facet |
East Asia and Pacific East Asia |
| relation |
Policy Research working paper ; no. WPS 4989 |
| description |
East Asia has experienced a dramatic
decrease in output growth volatility over the past 20 years.
This is good news, as output growth volatility affects poor
households because of coping strategies that have long-term,
harmful consequences, and the overall economy through its
negative impact on economic growth. This paper investigates
the factors behind this long decline in volatility, and
derives lessons about ways to mitigate renewed upward
pressure in face of the financial crisis. The authors show
that if, on the one hand, high trade openness has sustained
economic growth in the past several decades, on the other
hand, it has made countries more vulnerable to external
fluctuations. Although less frequent terms of trade shocks
and more stable growth rates of trading partners have helped
to reduce volatility in the past, the same external factors
are now putting renewed pressure on volatility. The way
forward seems therefore to be to counterbalance the external
upward pressure on volatility by improving domestic factors.
Elements under domestic control that can help countries deal
with high volatility include more accountable institutions,
better regulated financial markets, and more stable fiscal
and monetary policies. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Olaberria, Eduardo Rigolini, Jamele |
| author_facet |
Olaberria, Eduardo Rigolini, Jamele |
| author_sort |
Olaberria, Eduardo |
| title |
Managing East Asia's Macroeconomic Volatility |
| title_short |
Managing East Asia's Macroeconomic Volatility |
| title_full |
Managing East Asia's Macroeconomic Volatility |
| title_fullStr |
Managing East Asia's Macroeconomic Volatility |
| title_full_unstemmed |
Managing East Asia's Macroeconomic Volatility |
| title_sort |
managing east asia's macroeconomic volatility |
| 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_20090706140259 http://hdl.handle.net/10986/4180 |
| _version_ |
1764390288497836032 |
| spelling |
okr-10986-41802021-04-23T14:02:16Z Managing East Asia's Macroeconomic Volatility Olaberria, Eduardo Rigolini, Jamele ADVERSE EFFECTS AGGREGATE OUTPUT ALLOCATION OF RESOURCES AMERICAN ECONOMIC REVIEW ASSETS AVERAGE GROWTH AVERAGE GROWTH RATE AVERAGE LEVEL BANK SUPERVISION BANKING BANKING CRISIS BANKRUPTCY BOND BORROWERS BUSINESS CYCLE BUSINESS CYCLES BUSINESS PRACTICES CAPITA GROWTH CAPITAL FLOWS CAPITAL INFLOWS CENTRAL BANK CENTRAL BANKS COMMODITY COMMODITY PRICES COMPARATIVE ADVANTAGE CONSUMER PRICE CONSUMER PRICE INDEX CONSUMPTION GROWTH CONSUMPTION VOLATILITY CREDITOR CRISIS CRISIS VOLATILITY CROSS COUNTRY CROSS COUNTRY EVIDENCE CYCLICAL FISCAL POLICY CYCLICAL VOLATILITY DEPENDENT VARIABLE DEPOSIT DEPOSIT INSURANCE DEVELOPING COUNTRIES DEVELOPMENT ECONOMICS DISCRETIONARY POLICIES DIVERSIFICATION DOMESTIC CREDIT DUTCH DISEASE DYNAMIC PANEL EARNINGS ECONOMETRIC EVIDENCE ECONOMIC ACTIVITY ECONOMIC CRISES ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC MODELS ECONOMIC OUTLOOK ECONOMIC PERFORMANCE ECONOMIC POLICY ECONOMIC SHOCKS ECONOMIC UNCERTAINTY EFFECT OF RECESSIONS EMERGING ECONOMIES EMERGING MARKET EMERGING MARKET BUSINESS EMERGING MARKETS EQUITY ERROR TERM ESTIMATED REDUCTION ESTIMATION METHOD EXCHANGE EXCHANGE RATE EXOGENOUS SHOCKS EXPLANATORY VARIABLES EXTERNAL CONDITIONS EXTERNAL FACTORS EXTERNAL SHOCK EXTERNAL SHOCKS EXTERNAL VULNERABILITY FEDERAL RESERVE FINANCIAL CRISIS FINANCIAL DEPTH FINANCIAL DEVELOPMENT FINANCIAL FLOWS FINANCIAL INSTITUTIONS FINANCIAL MARKETS FINANCIAL OPENNESS FINANCIAL STABILITY FISCAL CONSOLIDATIONS FISCAL MANAGEMENT FISCAL POLICIES FISCAL POLICY FLUCTUATIONS FOREIGN CAPITAL FOREIGN DIRECT INVESTMENTS FUTURE GLOBAL BUSINESS GLOBAL ECONOMY GLOBALIZATION GOVERNMENT CONSUMPTION GOVERNMENT SPENDING GROWTH GROWTH PERFORMANCE GROWTH RATE GROWTH RATES GROWTH REGRESSION GROWTH VOLATILITY HIGH INCOME HIGH TRADE OPENNESS HIGH VOLATILITY HIGH-INCOME COUNTRIES HIGHER VOLATILITY HOUSEHOLD WELFARE IMPACT OF SHOCKS INCOME INCOME RISK INFLATION INFLATION EXPECTATIONS INFLATION RATE INFLATION TARGETING INFLATION VOLATILITY INTERACTION TERMS INTEREST INTEREST RATE INTEREST RATE SHOCKS INTEREST RATES INTERNATIONAL INTEREST INTERNATIONAL INTEREST RATES INTERNATIONAL MONETARY FUND INTERNATIONAL PRICES INTERNATIONAL RESERVES INVESTMENT INVESTORS LABOR MARKET LAGGED DEPENDENT LAGGED LEVELS LAGGED VALUES LENDER OF LAST RESORT LEVERAGE LIBERALIZATION LINK BETWEEN VOLATILITY LIQUIDITY LIQUIDITY CRISES LOW INCOME LOW INCOME COUNTRIES LOW-INCOME COUNTRIES MACROECONOMIC FLUCTUATIONS MACROECONOMIC MANAGEMENT MACROECONOMIC POLICIES MACROECONOMIC STABILITY MACROECONOMIC VOLATILITY MACROECONOMICS MEDIUM TERM MIDDLE INCOME MIDDLE INCOME COUNTRIES MIDDLE-INCOME COUNTRIES MONETARY ECONOMICS MONETARY POLICIES MONETARY POLICY MONETARY RESEARCH MONEY NATURAL DISASTERS NEGATIVE EFFECT NEGATIVE IMPACT 0 HYPOTHESIS OPEN ECONOMIES OPEN ECONOMY OUTPUT OUTPUT GROWTH OUTPUT VOLATILITY OVERALL VOLATILITY PER CAPITA GROWTH POLICY MAKERS POLICY RESEARCH POLITICAL ECONOMY POLITICAL POWER POLITICAL REGIME POOR COUNTRIES POOR HOUSEHOLDS POVERTY PRICES PRIVATE SECTOR PRODUCTION STRUCTURE PRUDENTIAL SUPERVISION RATE OF GROWTH RECESSIONS REVERSE CAUSATION REVIEW OF ECONOMICS RISK SHARING ROBUSTNESS CHECK SAFETY NETS SCATTER PLOT SERIAL CORRELATION SHARE SIGNIFICANT EFFECT SIGNIFICANT IMPACT SOCIAL PROTECTION STABILIZATION STABLE GROWTH STABLE INFLATION STANDARD DEVIATION SUM OF IMPORTS TAX TAX BASE VARIABILITY TERMS OF TRADE TRADE TRADE GROWTH TRADE SHOCKS TRADE VOLUMES TRADING PARTNERS UPWARD PRESSURE VOLATILITIES VOLATILITY MEASURES VOLATILITY OF INFLATION VOLATILITY OF TERMS OF TRADE SHOCKS WEIGHTS WORLD DEVELOPMENT INDICATORS WORLD ECONOMY East Asia has experienced a dramatic decrease in output growth volatility over the past 20 years. This is good news, as output growth volatility affects poor households because of coping strategies that have long-term, harmful consequences, and the overall economy through its negative impact on economic growth. This paper investigates the factors behind this long decline in volatility, and derives lessons about ways to mitigate renewed upward pressure in face of the financial crisis. The authors show that if, on the one hand, high trade openness has sustained economic growth in the past several decades, on the other hand, it has made countries more vulnerable to external fluctuations. Although less frequent terms of trade shocks and more stable growth rates of trading partners have helped to reduce volatility in the past, the same external factors are now putting renewed pressure on volatility. The way forward seems therefore to be to counterbalance the external upward pressure on volatility by improving domestic factors. Elements under domestic control that can help countries deal with high volatility include more accountable institutions, better regulated financial markets, and more stable fiscal and monetary policies. 2012-03-19T19:11:22Z 2012-03-19T19:11:22Z 2009-07-01 http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20090706140259 http://hdl.handle.net/10986/4180 English Policy Research working paper ; no. WPS 4989 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank Publications & Research :: Policy Research Working Paper East Asia and Pacific East Asia |