Thursday, 25 March 2010: 09:00
Objective: This paper – which is based on joint work with the Banco de Espana - aims to examine the commonalities and differences in the impact of the Global Financial Crisis on a number of Central, Eastern and Southeastern European (CESEE) countries as well as a number of major Latin American (LatAm) Economies.
Data / Methods: The paper uses a broad range of macroeconomic and financial variables to assess the key macro-financial strengths and vulnerabilities of the two regions at the beginning of the global financial crisis, including the impact of economic policies during the pre-crisis years. This is followed by a review of financial and real economic developments in these regions since the crisis started to impact emerging markets. Moreover, the paper looks at the policy response to the crisis in CESEE as well as Latin American countries. The paper provides a descriptive cross-country overview of the situation based on a unified analytical framework including cross-country vulnerability indicators. Throughout the paper there will by a strong emphasis on commonalities and differences between the two regions.
Results / Conclusions: Based on preliminary findings it appears that developments have not been homogenous across the two regions although countries with the largest economic imbalances tended to be most affected in CESEE and LatAm. National and in some countries international support measures helped stabilising financial markets but it is still too early to predict when the real economic effects of the crisis will abate. The degree to which CESEE and LatAm governments were able to use policy instruments to counter the real effects of the crisis was rather heterogeneous, depending inter alia on their initial fiscal position and the extent to which they had accumulated foreign exchange reserves before the crisis.
Data / Methods: The paper uses a broad range of macroeconomic and financial variables to assess the key macro-financial strengths and vulnerabilities of the two regions at the beginning of the global financial crisis, including the impact of economic policies during the pre-crisis years. This is followed by a review of financial and real economic developments in these regions since the crisis started to impact emerging markets. Moreover, the paper looks at the policy response to the crisis in CESEE as well as Latin American countries. The paper provides a descriptive cross-country overview of the situation based on a unified analytical framework including cross-country vulnerability indicators. Throughout the paper there will by a strong emphasis on commonalities and differences between the two regions.
Results / Conclusions: Based on preliminary findings it appears that developments have not been homogenous across the two regions although countries with the largest economic imbalances tended to be most affected in CESEE and LatAm. National and in some countries international support measures helped stabilising financial markets but it is still too early to predict when the real economic effects of the crisis will abate. The degree to which CESEE and LatAm governments were able to use policy instruments to counter the real effects of the crisis was rather heterogeneous, depending inter alia on their initial fiscal position and the extent to which they had accumulated foreign exchange reserves before the crisis.