Emerging Market Business Cycles: The Cycle is the Trend

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Emerging Market Business Cycles: The Cycle is the Trend

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dc.contributor.author Aguiar, Mark
dc.contributor.author Gopinath, Gita
dc.date.accessioned 2014-03-24T20:23:59Z
dc.date.issued 2007
dc.identifier.citation Aguiar, Mark, and Gita Gopinath. 2007. Emerging market business cycles: The cycle is the trend. Journal of Political Economy 115(1): 69-102. en_US
dc.identifier.issn 0022-3808 en_US
dc.identifier.uri http://nrs.harvard.edu/urn-3:HUL.InstRepos:11988098
dc.description.abstract Emerging market business cycles exhibit strongly countercyclical current accounts, consumption volatility that exceeds income volatility, and “sudden stops” in capital inflows. These features contrast with developed small open economies. Nevertheless, we show that a standard model characterizes both types of markets. Motivated by the frequent policy regime switches observed in emerging markets, our premise is that these economies are subject to substantial volatility in trend growth. Our methodology exploits the information in consumption and net exports to identify the persistence of productivity. We find that shocks to trend growth—rather than transitory fluctuations around a stable trend—are the primary source of fluctuations in emerging markets. The key features of emerging market business cycles are then shown to be consistent with this underlying income process in an otherwise standard equilibrium model. en_US
dc.description.sponsorship Economics en_US
dc.language.iso en_US en_US
dc.publisher University of Chicago Press en_US
dc.relation.isversionof http://dx.doi.org/10.1086/511283 en_US
dash.license LAA
dc.title Emerging Market Business Cycles: The Cycle is the Trend en_US
dc.type Journal Article en_US
dc.description.version Version of Record en_US
dc.relation.journal Journal of Political Economy -Chicago- en_US
dash.depositing.author Gopinath, Gita
dc.date.available 2014-03-24T20:23:59Z

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