TY - BOOK ID - 84541943 TI - Output Volatility and Large Output Drops in Emerging Market and Developing Countries PY - 2007 SN - 1462359868 1452702691 1283515717 1451911319 9786613828163 PB - Washington, D.C. : International Monetary Fund, DB - UniCat KW - Exports and Imports KW - Finance: General KW - Foreign Exchange KW - Macroeconomics KW - Public Finance KW - Macroeconomics: Production KW - General Financial Markets: General (includes Measurement and Data) KW - Empirical Studies of Trade KW - Fiscal Policy KW - Finance KW - Currency KW - Foreign exchange KW - International economics KW - Production growth KW - Emerging and frontier financial markets KW - Exchange rate flexibility KW - Terms of trade KW - Fiscal policy KW - Production KW - Economic theory KW - Financial services industry KW - Economic policy KW - nternational cooperation KW - China, People's Republic of KW - Industrial productivity KW - Nternational cooperation UR - https://www.unicat.be/uniCat?func=search&query=sysid:84541943 AB - This paper establishes that output volatility and the size of output drops have declined across all countries over the past three decades, but remain considerably higher in developing countries than in industrial countries. The paper employs a Bayesian latent dynamic factor model to decompose output growth into global, regional, and country-specific components. The favorable trends in output volatility and large output drops in developing countries are found to result from lower country-specific volatility and more benign country-specific events. Evidence from cross-section regressions over the 1970-2003 period suggest that discretionary fiscal spending volatility, and terms of trade volatility together with exchange rate flexibility are key determinants of volatility and large output drops. ER -