IMF’s growth forecasts for non-advanced economies
Despite the initial lower spread of the virus in these countries, many factors would suggest a larger shock to hit their economies. J. Sandefur and A. Subramanian consider cross-country regressions where the dependent variable is the IMF's forecast revision or the growth forecast. They use as regressors factors representing external vulnerabilities (export/GDP, tourism/GDP, natural resources rent /GDP, indicator of past financial crises) and factors representing domestic shocks (stringency index, Google mobility, agriculture/GDP, fiscal spending/GDP, Covid-19 cases, forecast of Covid-19 cases). In the regressions they also include a dummy for the country being emerging/developing. They limit the data up to April 14, when the WEO was published.
Link to the paper here.
Paola Di Casola*
Posted by Maria Perrotta Berlin
*The opinions expressed in this post are the sole responsibility of the author and should not be interpreted as reflecting the views of Sveriges Riksbank.