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The relationship between the variables is unknown and Spearman’s rank correlation (ρ) is calculated to analyse the relationship among the variables before and after the crisis. Only those ρ which are significant at 5% level are considered.

H₀: ρ = 0 which means ρ is insignificant.

H₁: ρ ≠ 0 which means ρ is significant.

We reject null if p-value is <0.05, which means ρ is significant.

The analysis shows that the countries with the highest average GDP growth rates before the crisis had the lowest average GDP growth rate in the post-crisis period. This can be attributed to the fact that countries which grew relatively faster during the boom period prior to the crisis had access to easy credit from the US. After the crisis, as there was a huge liquidity crunch and credit dried up, growth rates of these countries declined drastically.

Pre-crisis average export share is positively related to post-crisis average export share. This means that those countries, which had a higher share of exports in the pre-crisis period, had a higher export share in the post-crisis period. If we consider the region-wise ranks, we see those regions that had a higher export share pre-crisis had a lower export share post crisis. However, this is not reflected in ρ. Therefore, the regional decline was more for countries with a higher export share. This may be because demand for imports by other countries declined due to a decrease in world demand due to the crisis.

Countries with higher average CAB in the pre-crisis period had higher CAB in the post-crisis period. This can be attributed to the fact that countries usually had a higher CAB initially because of better export performance, and in general, they were able to maintain their export performance as noted above and so continued to have a better CA position. CAB declined regionally, but it declined more for those countries that had a lower balance initially.

Countries with a higher average foreign exchange in the pre-crisis period had a higher foreign exchange in the post-crisis period. The build-up in reserves was generally because of better export performance, and since this was maintained post crisis, the reserves of these countries did not decline much.

Countries with a higher GFCF in the pre-crisis period had a higher GFCF in the post-crisis period. This can be because post crisis, interest rates declined, and governments also undertook expansionary fiscal policies particularly increasing investment as part of the recovery package due to the crisis.

The ρ values calculated to check the relationship between the other variables were found to be insignificant.