On the (Changing) asymmetry of global spillovers: Emerging markets vs. advanced economies

Abstract

This paper examines growth spillovers between emerging markets (EMs) and advanced economies (AEs). Our empirical results based on a two-block set-up and covering the period 1991 to 2015 are twofold. First, we show that the size of the spillovers running from EMs to AEs is about a fifth of these running from AEs to EMs. Second, results point to spillovers from EMs to AEs having increased over the second half of the sample period. We present suggestive evidence that the (evolving) structure of interdependencies play an important role in explaining the existence of “asymmetrical spillovers” between these similar sized blocks.