The Rising Resilience of Emerging Market and Developing Economies

Economic performance in many emerging market and developing economies (EMDEs) improved substantially over the past 20 years. In the past decade EMDEs spent more time in expansion and had smaller downturns than advanced economies for the first time. We document the history of EMDEs' resilience over the past 60 years, and investigate what factors have been associated with it. We find that their improved performance since the 2000s is accounted for by both good policies and a lower incidence of external and domestic shocks-better policies account for about three-fifths of their improved resilience, while less frequent shocks account for the remainder.