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THE WORLD BANK ECONOMIC REVIEW, VOL. 14, NO. 2: 251–85 Macroeconomic Fluctuations in Developing Countries: Some Stylized Facts Pierre-Richard Agénor, C. John McDermott, and Eswar S. Prasad This article documents the main stylized features of macroeconomic fluctuations for 12 developing countries. It presents cross-correlations between domestic industrial output and a large group of macroeconomic variables, including fiscal variables, wages, infla- tion, money, credit, trade, and exchange rates. Also analyzed are the effects of economic conditions in industrial countries on output fluctuations in the sample developing coun- tries. The results point to many similarities between macroeconomic fluctuations in de- veloping and industrial countries (procyclical real wages, countercyclical variation in government expenditures) and some important differences (countercyclical variation in the velocity of monetary aggregates). Their robustness is examined using different detrending procedures. Understanding and distinguishing among the factors that affect the short- and long-run behavior of macroeconomic time series have been among the main ar- eas of recent research in quantitative macroeconomic analysis. Using a variety of econometric techniques, a substantial body of literature has documented a wide range of empirical regularities in macroeconomic fluctuations and business cycles across countries. These stylized facts have often been used as an empirical basis for formulating theoretical models of the business cycle and as a way to discrimi- nate among alternative classes of models. Most of the new research in this area has focused on industrial countries, paying less attention to developing countries.1 At least two factors may account for this. First, limitations on the quality and frequency of dat