Economic fluctuations in emerging market economies

This dissertation focuses on economic fluctuations in emerging economies, with a particular emphasis on the recent sudden stop crises. I use general equilibrium models to study the triggering and the propagation of emerging economy crises. The first chapter motivates the choice of this topic and presents an overview of the dissertation. The second chapter focuses on the triggering of the crisis with a detailed analysis of the 1997--1998 Korean crisis. I use a calibrated general equilibrium model to discriminate between the domestic and external causes of the crisis. I conclude that about half of the fall in the Korean gross domestic product can be attributed to each source. This empirical result is in line with the conclusions of the theoretical literature on the causes of emerging markets crises. The third chapter is devoted to the analysis of the role played by credit rationing in explaining the amplification of sudden stops in emerging economies. I show, in a general equilibrium model of a small open economy, that including a credit constraint is a crucial assumption to be able the reproduce the sudden stops main characteristics. Moreover, I show that three shocks, among the most often proposed ones to explain emerging economy crises, are able to trigger a sudden stop provided that a credit constraint is included into the model.;The fourth chapter is an empirical study of the link between capital flows and emerging economies business cycles. I first show that there exists a positive relationship between the two variables and that its nature changes after the 1994 Mexican crisis. Then, I prove that movements in capital flows do not Granger cause changes in emerging countries GDP growth rates even during sudden stop episodes, whereas the reverse causal relationship turns out to be true. I run dynamic panel data regressions on a panel of twenty-three emerging economies from 1979 to 2001 to obtain these results.