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The Impacts of the 2008 Global Financial Crisis on Developing Countries: The Case of the 15 Most Affected Countries

Author

Listed:
  • Hasan Cömert

    (Department of Economics, METU)

  • Esra Nur Uğurlu

    (Université of Paris 13)

Abstract

Benefiting from an event analysis, we investigate the transmission mechanism through which the recent global crisis impacted the 15 worst affected countries and the reasons behind the weak performances of these countries. The overall evidence shows that the trade channel was the most important mechanism in the transmission of the crisis from advanced economies to developing countries. The role of the financial channel varied in different countries. Some countries encountered massive financial reversals; some others experienced different degrees of financial stops. In general, as expected, the most affected countries in our set are the ones that experienced both financial reversals and a dramatic decline in their exports. Although almost all these countries experienced spectacular growth performances from 2002 to 2008, they also accumulated significant vulnerabilities, which were mainly related to the structural problems of their integration into the world economy during the same time period. Furthermore, those countries that were unwilling or unable to conduct considerable countercyclical fiscal and monetary policies were among the most affected ones in our sample.

Suggested Citation

  • Hasan Cömert & Esra Nur Uğurlu, 2015. "The Impacts of the 2008 Global Financial Crisis on Developing Countries: The Case of the 15 Most Affected Countries," ERC Working Papers 1509, ERC - Economic Research Center, Middle East Technical University, revised Oct 2015.
    • Handle: RePEc:met:wpaper:1509
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    References listed on IDEAS

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    More about this item

    Keywords

    comparative country studies; developing countries; financial crises; financial flows; trade;
    All these keywords.

    JEL classification:

    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • G02 - Financial Economics - - General - - - Behavioral Finance: Underlying Principles
    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • F10 - International Economics - - Trade - - - General

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