This post provides the current version of the paper titled "Medium-Term Cycles and Financial Crises in Semi-periphery Countries" by Peeters, B. and Defraigne, J.-C. (forthcoming). This paper introduce the concept of Center Leader economies' Industrial-Financial cycles (CLIF cycles) to explaing how these medium-term cycles trigger large counter-cyclical financial inflows in semi-periphery countries.
Abstract:
This study assesses the existence of a pattern of balance-of-payment financial crises (BOP crises) to semi-periphery economies driven by large medium-term cycles in center countries. Based on the concepts of medium-term cycles and center-periphery, we first introduce the Center Leader economies' Industrial-Financial cycles (CLIF cycles). We then explain how these CLIF cycles trigger large counter- cyclical financial inflows in semi-periphery countries that subsequently create BOP crises. This enables us to account for (i) a periodic pattern characterizing international financial flows between center and semi-periphery economies since the 1970s, and (ii) how this pattern is at the root of the BOP crises in semi-periphery countries. We propose a historical review of the crises in semi-periphery countries since the 1970s. This highlights that the last three major waves of BOP crises in the semi-periphery (during the 1980s, 1994-2001, and 2008-2019) are each linked with an upward and downward phase of the CLIF cycles.
PDF file here
As a complementary resource, I recommend reading this study, which provides statistical evidence supporting several key hypotheses presented in this paper.