Title Exogenous shocks and growth crises in low-income countries : a vulnerability index / prepared by Era Dabla-Norris and Yasemin Bal Gunduz

Published Washington, D.C. : International Monetary Fund, 2013

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Description 1 online resource (40 pages :) : illustrations Series IMF working paper ; WP/12/264 IMF working paper ; WP/12/264. Contents Cover; Contents; I. Introduction; II. Literature Review; III. Methodology; IV. Empirical Analysis: Econometric Approach; A. Probit Model; B. Estimation Results: Benchmark Probit Specifications; V. Empirical Analysis: Signaling Approach; A. Methodology: Signaling Approach; B. Results: Signaling Approach; C. Assessment of Vulnerabilities since 1990s; VI. Concluding Remarks; References; Figures; 1. Identification of External Shock Episodes; 2. Distribution of Real GDP per capita: Crises versus Normal Episodes; 3. Effects of Explanatory Variables on Predicted Probability of Growth Crises 4. Predicted Probability of Growth Crises: Performance of the Vulnerability Index and its Sub-Components5. Marginal Effects of Sub-components on Predicted Probability of Growth Crises; 6. Growth Decline Vulnerability Index; 7. Vulnerability Index and its Components; Appendix Figure; 1. Flags Raised by Selected Indicators of the Vulnerability Index; Tables; 1. Median Real GDP per capita Growth; 2. Probability of Growth Crisis; 3. Benchmark Regression: Average and Conditional Marginal Effects; 4. Marginal Effects of Explanatory Variables on Crisis Probability; 5. Predicted Probabilities 6. Non-parametric Signaling Approach: Performance of Indicators and Model Fit7. Distribution of Predicted Probabilities: Vulnerability Index versus its Sub-components; 8. Vulnerability Index; Appendix Tables; 1. Correlation Matrix for Exogenous Shocks (1990-2008); 2. List of Countries in the Sample; 3. Variables Used in the Probit Regressions and the Signalling Approach; 4. Distribution of Explanatory Variables (1990-2009); 5. Robustness Check with Alternative Specifications: All Growth Crisis Events Summary This paper develops a new index which provides early warning signals of a growth crisis in the event of large external shocks in low-income countries. Multivariate regression analysis and a univariate signaling approach are used to map information from a parsimonious set of underlying policy, structural, and institutional indicators into a composite vulnerability index. The results show that vulnerabilities to a growth crisis in low-income countries declined significantly from their peaks in the early 1990s, but have risen in recent years as fiscal policy buffers were expended in the wake of the global financial crisis Bibliography Includes bibliographical references Subject Economic development -- Developing countries -- Econometric models Capital movements -- Developing countries Capital movements Economic development -- Econometric models Developing countries Form Electronic book Author Bal-Gündüz, Yasemin

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