Traditionally, economic growth and business cycles have been treated independently. However, the dependence of GDP levels on its history of shocks, what economists refer to as 'hysteresis,' argues for unifying the analysis of growth and cycles. In this paper, we review the recent empirical and...

We collect new data to assess the importance of supply-side credit market frictions by studying the impact of financial sector recapitalization packages on the growth performance of firms in a large cross-section of 50 countries during the recent crisis. We develop an identification strategy...

Credibility and financing problems are important reasons why countries may seek to involve external institutions in the design and implementation of stabilization programs. In particular, governments may rely on external institutions to ‘enforce’ programs that would otherwise lack...

The inability to cope effectively with the legacy of the Soviet-type economy is compounded by autonomous policy errors. Apart from too nervous reactions to monthly changes in the inflation rate, the major mistake has been the timing and scale of tightening monetary policy. The sharp increases in...

The Philippine economy grew slower than expected at 3.7 percent in 2011, held back by weak public spending and external demand. In the fourth quarter (Q4), growth slightly improved at 3.7 percent. As in past quarters, growth was driven by remittance-fueled household consumption, which grew by...

This paper uses the strategy and data of Blanchard and Perotti (BP) to identify fiscal shocks and estimate fiscal multipliers for the United States. With these results, it computes the cumulative multiplier of Ramey and Zubairy (2018), now common in the literature. It finds that, contrary to the...