Vulnerabilities Underlying the Impact of the Global Financial Crisis Across Europe

摘要

This work inquires whether there are precrisis indicators that contribute to explaining cross-country differences in the growth performance incidence of the 2008-9 global financial crisis. Focusing on Europe, we trace the differences between advanced economies and emerging markets, as well as the particular case of the Central and Eastern European new member states of the European Union. In addition to variables that have been considered by previous studies, we propose a number of other indicators that capture international financial linkages and which are potentially relevant given the European experience. Our cross-country analysis-which separates the experiences of the EU new member states, emerging Europe, and the other countries-reveals pronounced differences within Europe. Our results suggest that the composition of capital inflows and external debt prior to the crisis are relevant in explaining those differences, both regarding the crisis impact as well as the recovery phase.