Collateral damage: Dollar strength and emerging markets’ growth

Druck, Pablo; Magud, Nicolás; Mariscal, Rodrigo

doi:10.1016/j.najef.2017.10.007

Cited by 24 publications

(15 citation statements)

References 10 publications

(1 reference statement)

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“…Recent research shows how long‐run dollar cycles affect economic development in DCs. Dollar appreciation (as during 1981–85, 1995–2002, 2008–09, 2012–15, when the data set ends) is associated with a fall in commodity prices, a fall in DCs’ GDP growth, and a rise in the number of DCs experiencing external crises (due to large foreign currency debt and sharp exchange rate depreciations) (Chow et al., ; Druck et al., ).…”

Section: Anti‐developmental Forces In the World Economy Todaymentioning

confidence: 99%

The Developmental State: Dead or Alive?

Wade¹

2018

Development and Change

173

108

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Before the 1980s, the mainstream Western prescription for developing countries to catch up with the West assigned the state a leading role in governing the market. In the 1980s, this shifted to a framework‐providing role in a largely deregulated and maximally open economy. Also in the 1980s, it became apparent that some East Asian capitalist economies were growing so fast that they would become ‘developed’ in the foreseeable future, marking them out as completely exceptional. Mainstream economists explained their success as the result of following the Western prescription, while other scholars attributed this rapid growth to ‘the developmental state’. This essay compares these two explanations of successful economic development, concluding in favour of the latter — with respect to the catch‐up decades. But what happened subsequently? Several scholars who accept the key role of the developmental state in the early period of fast industrialization in East Asia now argue that South Korea, Taiwan and Singapore have transformed from developmental to close‐to‐neoliberal states. This contribution argues that the erstwhile East Asian developmental states have indeed changed, but they have not transformed into neoliberal states. Rather they have adapted and evolved, but still undertake market‐steering, ‘societal mission’ roles well beyond neoliberal limits. The essay also suggests how other developing countries can learn lessons from their experience.

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Section: Anti‐developmental Forces In the World Economy Todaymentioning

confidence: 99%

The Developmental State: Dead or Alive?

Wade¹

2018

Development and Change

173

108

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“…Druck, Magud, and Mariscal (2015) described declines in developing countries' real GDP as US exchange rate appreciation (associated with US monetary contraction) lowers commodity prices. Real GDP rises temporarily, which also indicates that transmission via the trade channel is faster than through the financial channel.…”

Section: Impact Of United States Broad Money Shockmentioning

confidence: 99%

“…Druck, Magud, and Mariscal (2015) described a path that does not explicitly appear in the GVAR: an increase in US interest rates pushes US exchange rate appreciation and lowers commodity prices, reducing developing countries' real GDP. Inflation is predicted to rise in the short term because of imported inflation due to depreciation.…”

Section: Impact Of United States Interest Ratesmentioning

confidence: 99%

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Spillovers of United States and People's Republic of China Shocks on Small Open Economies: The Case of Indonesia

et al. 2016

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in Asian Development Bank InstituteThe Working Paper series is a continuation of the formerly named Discussion Paper series; the numbering of the papers continued without interruption or change. ADBI's working papers reflect initial ideas on a topic and are posted online for discussion. ADBI encourages readers to post their comments on the main page for each working paper (given in the citation below). Some working papers may develop into other forms of publication. The views expressed in this paper are the views of the author and do not necessarily reflect the views or policies of ADBI, ADB, its Board of Directors, or the governments they represent. ADBI does not guarantee the accuracy of the data included in this paper and accepts no responsibility for any consequences of their use. Terminology used may not necessarily be consistent with ADB official terms.Working papers are subject to formal revision and correction before they are finalized Asian Development Bank Institute Kasumigaseki Building 8F 3-2-5 Kasumigaseki, Chiyoda-ku Tokyo 100-6008, JapanTel:+81-3-3593-5500 Fax:+81-3-3593-5571 URL:www.adbi.org E-mail: info@adbi.org AbstractThis paper examines the impact of certain external shocks originating from the United States (US) and People's Republic of China (PRC) on Indonesia as a small open economy. The spillover effects of tapering off, an interest rate hike, exchange rate devaluation, and real gross domestic product (GDP) are analyzed. Two versions of the global vector autoregression model are employed, which covers 33 countries and considers both financial and trade relations among countries. Spillover assessments are conducted through impulse responses with 1,000 bootstrap replications, and compared to the responses of peer countries.The results suggest that the main risk for Indonesia's real GDP is a shock to the PRC's real GDP, while a US interest rate hike is the greatest risk to Indonesia's exchange rate depreciation in the short term, especially compared to the US tapering off. Moreover, the dominant transmission channel of US monetary tightening is through finance, dampening economic growth in small open economies. JEL Classification: C32, E17, F47ADBI Working Paper 616 Harahap, et. al.

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“…Uma pesquisa recente mostra como os ciclos de longo prazo do dólar afetam o desenvolvimento econômico em CDs. A valorização do dólar (como em 1981-85, 1995-2002, 2008-09, 2012-15, quando o conjunto de dados termina) está associada a uma queda nos preços das commodities, uma queda no crescimento do PIB dos DCs, e um aumento no número de CDs enfrentando crises externas (devido à grande dívida em moeda estrangeira e fortes depreciações cambiais) (Chow et al, 2015;Druck et al, 2015).…”

Section: Forças Anti-desenvolvimento Na Economia Mundial Hojeunclassified

O Estado desenvolvimentista: vivo ou morto?

Wade

2018

DesDeb

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Antes da década de 1980, a principal receita dada pelo Ocidente aos países em desenvolvimento para acompanhá-los atribuía ao Estado um papel de liderança sobre o mercado. Nos anos 1980, a situação mudou para um papel de fornecimento de um aparato para uma economia amplamente desregulada e aberta. Também tornou-se evidente que algumas economias capitalistas do Leste Asiático estavam crescendo tão rapidamente que se tornariam «desenvolvidas» em um futuro próximo, marcando-as como completamente excepcionais. Economistas do mainstream explicaram seu sucesso como resultado da adoção das receitas ocidentais, enquanto outros estudiosos atribuíram esse rápido crescimento ao “Estado Desenvolvimentista”. Este ensaio compara essas duas explicações para o desenvolvimento econômico bem-sucedido, concluindo em favor do último. O artigo também analisa os acontecimentos posteriores. Vários estudiosos que aceitam o papel fundamental do estado desenvolvimentista no período inicial de rápida industrialização no leste da Ásia passaram a argumentar que a Coreia do Sul, Taiwan e Cingapura se transformaram de estados desenvolvimentistas em estados quase neoliberais. Essa contribuição argumenta que os antigos Estados desenvolvimentistas do Leste Asiático realmente mudaram, mas não se transformaram em estados neoliberais. Em vez disso, eles se adaptaram e evoluíram, mas ainda assumem papéis de “missão social” de direção de mercado, muito além dos limites neoliberais. O ensaio também sugere como outros países em desenvolvimento podem aprender lições dessa experiência.

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Collateral damage: Dollar strength and emerging markets’ growth

Cited by 24 publications

References 10 publications

The Developmental State: Dead or Alive?

The Developmental State: Dead or Alive?

Spillovers of United States and People's Republic of China Shocks on Small Open Economies: The Case of Indonesia

O Estado desenvolvimentista: vivo ou morto?

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