Policy Responses to the Global Financial Crisis: What Did Emerging Economies Do Differently?
By Francisco Ceballos ; Tatiana Didier ; Constantino Hevia ; Sergio Schmukler
January 2013
Language: English
Keywords
- financial crises
- fiscal policy
- monetary policy
- policy cyclicality
JEL Classification
- E50
- F30
- G01
- G15
Abstract
In contrast to the past, many emerging countries faced the global financial crisis of 2008-2009 with more solid financial positions and the required credibility and capacity to conduct countercyclical policies. This allowed them to better cope with the global downturn and thus behave more similarly to developed countries. This paper documents the policy responses and discusses other factors that allowed emerging countries to partially absorb the negative external shock. In particular, it characterizes (i) monetary and exchange rate policies, (ii) fiscal policy, and (iii) external and domestic financial positions.