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Exogenous Shocks and Growth Crises in Low-Income Countries :, A Vulnerability Index, Era Dabla-Norris, Yasemin Bal Gunduz

This paper develops a new index which provides early warning signals of a growth crisis in the event of large external shocks in low-income countries. Multivariate regression analysis and a univariate signaling approach are used to map information from a parsimonious set of underlying policy, structural, and institutional indicators into a composite vulnerability index. The results show that vulnerabilities to a growth crisis in low-income countries declined significantly from their peaks in the early 1990s, but have risen in recent years as fiscal policy buffers were expended in the wake of the global financial crisis.
Table Of Contents
Cover; Contents; I. Introduction; II. Literature Review; III. Methodology; IV. Empirical Analysis: Econometric Approach; A. Probit Model; B. Estimation Results: Benchmark Probit Specifications; V. Empirical Analysis: Signaling Approach; A. Methodology: Signaling Approach; B. Results: Signaling Approach; C. Assessment of Vulnerabilities since 1990s; VI. Concluding Remarks; References; Figures; 1. Identification of External Shock Episodes; 2. Distribution of Real GDP per capita: Crises versus Normal Episodes; 3. Effects of Explanatory Variables on Predicted Probability of Growth Crises
Literary Form
non fiction
Description based upon print version of record
Physical Description
1 online resource (42 p.)
Specific Material Designation
Form Of Item

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