Macroeconomic Fluctuations in Developing Countries: Some Stylized Facts

This article documents the main stylized features of macroeconomic fluctuations for 12 developing countries. It presents cross-correlations between domestic industrial output and a large group of macroeconomic variables, including fiscal variables, wages, infla-tion, money, credit, trade, and exchange rates. Also analyzed are the effects of economic conditions in industrial countries on output fluctuations in the sample developing coun-tries. The results point to many similarities between macroeconomic fluctuations in de-veloping and industrial countries (procyclical real wages, countercyclical variation in government expenditures) and some important differences (countercyclical variation m the velocity of monetary aggregates). Their robustness is examined using different detrending procedures. Understanding and distinguishing among the factors that affect the short- and long-run behavior of macroeconomic time series have been among the main ar-eas of recent research in quantitative macroeconomic analysis. Using a variety of econometric techniques, a substantial body of literature has documented a wide range of empirical regularities in macroeconomic fluctuations and business cycle