Appendix I. Data Sources and Definitions

Paolo Mauro, Torbjorn Becker, Jonathan Ostry, Romain Ranciere, and Olivier Jeanne
Published Date:
April 2007
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Data on per capita GDP are purchasing power-parity-adjusted (1990 international Geary-Khamis dollars), drawn from Maddison (2003). For the purposes of the present study, the sample period is limited to 1970–2001, yielding 4,882 country-year observations. At the end of the sample period, the data cover 167 countries. The shock dates or the criteria for identifying shock dates are mainly based on existing studies. Since different studies analyze different types of shock, samples vary and, in general, do not cover the same extensive set of country-years available for the output data.

Financial and Macroeconomic Shocks

Currency crises are identified using the following three conditions (as in Frankel and Rose, 1996): (i) cumulative devaluation/depreciation of at least 25 percent over a 12-month period; (ii) devaluation/depreciation rate at least 10 percentage points greater than in the preceding 12 months; and (iii) a minimum of 3 years since the last crisis. Given the relatively large depreciation/devaluation required, the definition of a currency crisis seems geared toward emerging and developing countries; nevertheless, to ensure consistency, the same definition was applied to all countries, using the IMF’s International Financial Statistics (IFS) data. The banking crisis dummy takes the value 1 if at least one of the following studies identifies the country-year as an outbreak of a banking crisis: Kaminsky and Reinhart (1999), Vila (2000), Bell and Pain (2000), Caprio and Klingebiel (2003), and Demirgüç-Kunt and Detragiache (2005). The use of several studies produces a large sample, though the definition of a banking crisis is not identical across studies. Using banking crisis dates drawn from only one study does not change the main results. The debt crisis dummy records a 1 if at least one of the following studies identifies the country-year as the beginning of a debt crisis: Detragiache and Spilimbergo (2001); Manasse and Roubini (2005); and Reinhart, Rogoff, and Savastano (2003). As was mentioned in the text, sudden stops in financial flows are defined as a worsening in the financial account balance by more than 5 percentage points of GDP.

Country-Specific External Shocks

Terms of trade shocks are defined as a 10 percent worsening in the terms of trade for goods, based on the IMF’s World Economic Outlook (WEO) data. The dummy variable for disasters takes the value 1 if the number of persons injured times 0.3 plus the number of persons killed is greater than 0.01 percent of the country’s total population; the data are drawn from the World Health Organization’s Emergency Events Database (EM-DAT) and published by the Center for Research on the Epidemiology of Disasters (CRED) (available on the Web at

Sociopolitical Shocks

Data from the Correlates of War project were used to construct a war dummy, which records a 1 in the first year of a war. Shocks to the political system are defined as a deterioration by 3 points or more in the Polity index published by the Polity IV project (see Marshall and Jaggers, 2002 for a definition of the variable). The data are drawn from (Center for International Development and Conflict Management, University of Maryland; and Center for Global Policy, George Mason University).

Global Shocks

The global interest rate shock takes the value 1 when the U.S. federal funds rate increases by more than 150 basis points in one year. Oil price shocks refer to the first year of these episodes (i.e., 1973, 1978, 1989, 1999).

Boom-Bust Cycles

Lending boom dates are drawn from Gourinchas, Valdés, and Landerretche (2001, Table A1). The dummy variable takes the value 1 in the year after a lending boom ends. A growth boom is defined as a three-year period with average growth exceeding by two standard deviations the country’s average growth rate estimated over the entire sample period. The dummy variable takes the value 1 in the first year after such an episode.

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