1. The Real Effect of Financial Crises in the European Transition Economies
- Author
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Davide Furceri, Aleksandra Zdzienicka-Durand, Organisation de Coopération et de Développement Economiques = Organisation for Economic Co-operation and Development (OCDE), Groupe d'analyse et de théorie économique (GATE), Université Lumière - Lyon 2 (UL2)-Ecole Normale Supérieure Lettres et Sciences Humaines (ENS LSH)-Centre National de la Recherche Scientifique (CNRS), Organisation de Coopération et de Développement Economiques (OCDE), Groupe d'analyse et de théorie économique (GATE Lyon Saint-Étienne), Centre National de la Recherche Scientifique (CNRS)-Université de Lyon-Université Jean Monnet [Saint-Étienne] (UJM)-Université Claude Bernard Lyon 1 (UCBL), Université de Lyon-Université Lumière - Lyon 2 (UL2)-École normale supérieure - Lyon (ENS Lyon), Groupe d'Analyse et de Théorie Economique Lyon - Saint-Etienne (GATE Lyon Saint-Étienne), École normale supérieure de Lyon (ENS de Lyon)-Université Lumière - Lyon 2 (UL2)-Université Claude Bernard Lyon 1 (UCBL), Université de Lyon-Université de Lyon-Université Jean Monnet - Saint-Étienne (UJM)-Centre National de la Recherche Scientifique (CNRS), Furceri, D, and Zdzienicka, A
- Subjects
Crises ,Financial Crisis ,Output Growth ,CEECs ,Output Growth,Financial Crisis,CEECs ,JEL: G - Financial Economics/G.G1 - General Financial Markets ,JEL: E - Macroeconomics and Monetary Economics/E.E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook ,[SHS.ECO]Humanities and Social Sciences/Economics and Finance - Abstract
Working Paper GATE 2009-20; International audience; The aim of this work is to assess the impact of financial crises on output for 11 European transition economies (CEECs). The results suggest that financial crises have a significant and permanent effect, lowering long-term output by about 17 percent. The effect is more important in smaller countries, with relative higher dependence on external financing, and in which the banking sector noticed more important financial disequilibria. We also found that fiscal policy measures have been the most efficient tools in dealing with the crises, while the role of monetary policy instruments has been rather blinded. Exchange rate resulted to be more a propagator than a crises absorber, while the IMF credit has been found to have positive (but not significant) impact on growth performance. Finally, the effect for the CEECs is much bigger than in the EU advanced economies, for which we found that financial crises lowers long-term output only by 2 percent.
- Published
- 2011