Emerging Europe—Lessons from the Boom-Bust Cycle


By Ajai Chopra

Almost unnoticed, amid the difficulties in western Europe, the other half of the continent has begun to recover from the deepest slump in its post-transition period. The emerging economies in central and eastern Europe will grow by 3¾ percent this year and next—a relief after the 6 percent decline in 2009.

Why was the crisis so severe—and how do we avoid a repeat? We consider just that question in our fall 2010 Regional Economic Outlook: Europe. While the crisis was triggered by external shocks, it is clear that domestic imbalances and policies also played a key role. Continue reading

Emerging Market Countries and the Crisis: How Have They Coped?


By Reza Moghadam

How time flies: only a year ago, we were in the throes of the biggest global crisis since the Great Depression. As the extent of the damage to institutions in financial centers became evident—starkly highlighted by the Lehman bankruptcy—and the crisis started to affect emerging market economies (EMs), a timely and coordinated countercyclical response was launched.

This helped stave off the worst of the crisis. The IMF supported the global response by increasing its resources and overhauling its lending framework to help those facing financing pressures. A recovery is now taking hold in many parts of the world.

Six months ago, we took a preliminary look at the design and performance of IMF-supported programs in emerging markets. In a forthcoming paper, we are casting a wider net—examining factors that determined the extent to which a broader group of EMs were affected by the crisis, the policy measures they have taken, factors shaping the ongoing recovery, and sustainability considerations over the medium term.

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