Characterizing Business Cycles in Small Economies

Hnatkovska, Viktoria ; Koehler-Geib, Fritzi

World Bank, Washington, DC

关键词: BUSINESS CYCLES;    SMALL STATES;    VOLATILITY;    FISCAL POLICY;    FISCAL RULES;   

DOI  :  10.1596/1813-9450-8527
RP-ID  :  WPS8527

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

This paper aims to document a set ofstylized facts characterizing business cycle dynamics insmaller economies. The paper uses a large sample ofcountries spanning 1960-2014 to show that country size is asignificant factor affecting countries' volatility,comovement with gross domestic product and real interestrate, and persistence. Specifically, analysis finds thatsmaller countries (i) tend to have more volatile grossdomestic product; (ii) have more volatile, less procyclical,and less persistent investment; (iii) exhibit more volatiletrade balance and current account, have more procyclicalexports, and thus less countercyclical trade balance; (iv)have more volatile government consumption and moreprocyclical public revenues and fiscal balance; and (v)possess more procyclical inflation. The effects of countrysize remain robust even after we control for the level ofeconomic and institutional development, the presence offiscal rule(s) and fixed exchange rates, and the commodityexporting status.