Abstract
Drawing upon the experiences of Brazil, Russia, India and China (BRIC), we apply the Business Cycle Accounting methodology to study the phenomenon of rapid economic growth. We document that while efficiency wedges do contribute in a large part to growth, especially in Brazil and Russia, there is an increasing importance of investment wedges especially in the late 2000s, noted in China and India. The results are typically related to the stages of development with Brazil and Russia coming off a recession in the 1990s to grow in the 2000s, while India and China were on a comparatively stable growth path. Our results suggest, at least for the BRICs examined, that while efficiency wedges play a major role in jump-starting recovery, investment wedges are equally important for sustaining the recovery. Relating wedge patterns to institutional and financial reforms, we find that financial market developments and effective governance in BRICs in the last decade are consistent with improvements in investment and efficiency wedges that led to growth.
| Original language | English |
|---|---|
| Pages (from-to) | 381-413 |
| Number of pages | 33 |
| Journal | B.E. Journal of Macroeconomics |
| Volume | 13 |
| Issue number | 1 |
| DOIs | |
| Publication status | Published - 2013 Jan 1 |
| Externally published | Yes |
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Keywords
- BRIC
- business cycle accounting
- efficiency
- investment adjustment costs
- market frictions
- trend shocks
ASJC Scopus subject areas
- Economics and Econometrics
Cite this
Business cycle accounting of the BRIC economies. / Chakraborty, Suparna; Otsu, Keisuke.
In: B.E. Journal of Macroeconomics, Vol. 13, No. 1, 01.01.2013, p. 381-413.Research output: Contribution to journal › Article
}
TY - JOUR
T1 - Business cycle accounting of the BRIC economies
AU - Chakraborty, Suparna
AU - Otsu, Keisuke
PY - 2013/1/1
Y1 - 2013/1/1
N2 - Drawing upon the experiences of Brazil, Russia, India and China (BRIC), we apply the Business Cycle Accounting methodology to study the phenomenon of rapid economic growth. We document that while efficiency wedges do contribute in a large part to growth, especially in Brazil and Russia, there is an increasing importance of investment wedges especially in the late 2000s, noted in China and India. The results are typically related to the stages of development with Brazil and Russia coming off a recession in the 1990s to grow in the 2000s, while India and China were on a comparatively stable growth path. Our results suggest, at least for the BRICs examined, that while efficiency wedges play a major role in jump-starting recovery, investment wedges are equally important for sustaining the recovery. Relating wedge patterns to institutional and financial reforms, we find that financial market developments and effective governance in BRICs in the last decade are consistent with improvements in investment and efficiency wedges that led to growth.
AB - Drawing upon the experiences of Brazil, Russia, India and China (BRIC), we apply the Business Cycle Accounting methodology to study the phenomenon of rapid economic growth. We document that while efficiency wedges do contribute in a large part to growth, especially in Brazil and Russia, there is an increasing importance of investment wedges especially in the late 2000s, noted in China and India. The results are typically related to the stages of development with Brazil and Russia coming off a recession in the 1990s to grow in the 2000s, while India and China were on a comparatively stable growth path. Our results suggest, at least for the BRICs examined, that while efficiency wedges play a major role in jump-starting recovery, investment wedges are equally important for sustaining the recovery. Relating wedge patterns to institutional and financial reforms, we find that financial market developments and effective governance in BRICs in the last decade are consistent with improvements in investment and efficiency wedges that led to growth.
KW - BRIC
KW - business cycle accounting
KW - efficiency
KW - investment adjustment costs
KW - market frictions
KW - trend shocks
UR - http://www.scopus.com/inward/record.url?scp=84907706747&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=84907706747&partnerID=8YFLogxK
U2 - 10.1515/bejm-2012-0129
DO - 10.1515/bejm-2012-0129
M3 - Article
AN - SCOPUS:84907706747
VL - 13
SP - 381
EP - 413
JO - B.E. Journal of Macroeconomics
JF - B.E. Journal of Macroeconomics
SN - 1935-1690
IS - 1
ER -