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This paper investigates the medium- and long-term growth effects of the global financial crises on Low-Income Countries (LICs). Using several methodological approaches, including impulse response function analysis, growth spells techniques and panel regressions, The authors show that external demand (ED) shocks are not historically associated with sharp declines in output growth. Given existing evidence that LICs were primarily impacted by such a shock in the global financial crisis, the analysis provides some optimism on the chances that LICs will avoid a protracted period of slow growth. However, they also show that there seem to be persistent output losses associated with ED shocks in the medium-run.
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