Business Cycles in Developing Countries: Are They Different?

TY - JOUR

T1 - Business Cycles in Developing Countries

T2 - Are They Different?

AU - Rand, John

AU - Tarp, Finn

N1 - Final Manuscript for World Development

PY - 2002

Y1 - 2002

N2 - This paper demonstrates that developing countries differ considerably from their developed counterparts when focus is on the nature and characteristics of short run macroeconomic fluctuations. Cycles are generally shorter, and the stylized facts of business cycles across countries are more diverse than those of the rather uniform industrialized countries. Supply-side models are generally superior in explaining changes in output, but a “one-size fits all” approach in formulating policy is inappropriate. Our results also illustrate the critical importance of understanding business regularities as a stepping-stone in the process of designing appropriate stabilization policy and macroeconomic management in developing countries.

AB - This paper demonstrates that developing countries differ considerably from their developed counterparts when focus is on the nature and characteristics of short run macroeconomic fluctuations. Cycles are generally shorter, and the stylized facts of business cycles across countries are more diverse than those of the rather uniform industrialized countries. Supply-side models are generally superior in explaining changes in output, but a “one-size fits all” approach in formulating policy is inappropriate. Our results also illustrate the critical importance of understanding business regularities as a stepping-stone in the process of designing appropriate stabilization policy and macroeconomic management in developing countries.

M3 - Journal article

SN - 0305-750X

VL - 30

JO - World Development

JF - World Development

IS - 12

ER -