Business cycle accounting of the BRIC economies

Suparna Chakraborty, Keisuke Otsu

Research output: Contribution to journalArticle

7 Citations (Scopus)

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 languageEnglish
Pages (from-to)381-413
Number of pages33
JournalB.E. Journal of Macroeconomics
Volume13
Issue number1
DOIs
Publication statusPublished - 2013 Jan 1
Externally publishedYes

Fingerprint

BRIC countries
Business cycle accounting
China's economy
Brazil
Russia
China
India
Economic growth
Stages of development
Financial market development
Institutional reform
Jump
Recession
Methodology
Governance
Financial reform

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 journalArticle

Chakraborty, Suparna ; Otsu, Keisuke. / Business cycle accounting of the BRIC economies. In: B.E. Journal of Macroeconomics. 2013 ; Vol. 13, No. 1. pp. 381-413.
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