TY - JOUR
T1 - Business cycle accounting of the BRIC economies
AU - Chakraborty, Suparna
AU - Otsu, Keisuke
N1 - Funding Information:
aWe are deeply grateful to the editor, Dr. Tiago Cavalcanti, and two anonymous referees for their suggestions to improve the paper. We also thank Robert Dekle, Guillaume Vanden-broucke, Joel David, and Jagjit Chaddha for helpful suggestions and comments. We have also benefited from comments by audiences at the University of Southern California, 8th Annual Conference on Economic Growth and Development, Indian Statistical Institute 2012, and the 2012 Asian Meeting of the Econometric Society, Delhi School of Economics. Our special thanks to Tetsuaki Takano for excellent research assistance. Chakraborty gratefully acknowledges financial support from the University of San Francisco Faculty Development Fund. All remaining errors are our own. *Corresponding author: Suparna Chakraborty, Department of Economics, University of San Francisco, 2130 Fulton Street, San Francisco, California 94117, USA, Tel.: +1-415-422-4715, e-mail: schakraborty2@usfca.edu Keisuke Otsu: School of Economics, University of Kent, Canterbury, Kent, UK
Publisher Copyright:
© 2013 by Walter de Gruyter Berlin Boston.
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
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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 -
