Managing Economic Volatility and Crises
A Practitioner's Guide

This collection explores the phenomenon of economic volatility, which studies show had adverse effects on long-run growth.

Joshua Aizenman (Edited by), Brian Pinto (Edited by)

9780521168595, Cambridge University Press

Paperback, published 14 April 2011

614 pages
22.9 x 15.2 x 3.5 cm, 0.89 kg

Economic volatility has come into its own after being treated for decades as a secondary phenomenon in the business cycle literature. This evolution has been driven by the recognition that non-linearities, long buried by the economist's penchant for linearity, magnify the negative effects of volatility on long-run growth and inequality, especially in poor countries. This collection organizes empirical and policy results for economists and development policy practitioners into four parts: basic features, including the impact of volatility on growth and poverty; commodity price volatility; the financial sector's dual role as an absorber and amplifier of shocks; and the management and prevention of macroeconomic crises. The latter section includes a cross-country study, case studies on Argentina and Russia, and lessons from the debt default episodes of the 1980s and 1990s.

Contributors
Acknowledgements
Foreword
Overview Joshua Aizenman and Brian Pinto
Part I. What Is Volatility and Why Does It Matter?: 1. Volatility: definitions and consequences Holger Wolf
2. Volatility and growth Viktoria Hnatkovska and Norman Loayza
3. Volatility, income distribution, and poverty Thomas Laursen and Sandeep Mahajan
Part II. Commodity Prices and Volatility: 4. Agricultural commodity price volatility Jan Dehn, Christopher Gilbert, and Panos Varangis
5. Managing oil booms and busts in developing countries Julia Devlin and Michael Lewin
Part III. Finance and Volatility: 6. Finance and volatility Stijn Claessens
7. Evaluating pricing signals from the bond markets John J. Merrick, Jr
Part IV. Managing Crises: 8. Managing macroeconomic crises: policy lessons Jeffrey Frankel and Shang-Jin Wei
9. Lessons from the Russian crisis of 1998 and recovery Brian Pinto, Evsey Gurvich, and Sergei Ulatov
10. Argentina's macroeconomic collapse: causes and lessons Luis Servén and Guillermo Perry
11. Default episodes in the 1980s and 1990s: what have we learned? Punam Chuhan and Federico Sturzenegger
Technical appendix Viktoria Hnatkovska
Index.

Subject Areas: Business & management [KJ], Finance & accounting [KF], Political economy [KCP], Macroeconomics [KCB]