Managing Sudden Stops

The recent reversal of capital flows to emerging markets has pointed up the continuing relevance of the sudden stop problem. This paper analyzes the sudden stops in capital flows to emerging markets since 1991. It shows that the frequency and duration of sudden stops have remained largely unchanged, but that the relative importance of different factors in their incidence has changed. In particular, global factors appear to have become more important relative to country-specific characteristics and policies. Sudden stops now tend to affect different parts of the world simultaneously rather than bunching regionally. Stronger macroeconomic and financial frameworks have allowed policy makers to respond more flexibly, but these more flexible responses have not guaranteed insulation or mitigated the impact of the phenomenon. These findings suggest that the challenge of understanding and coping with capital-flow volatility is far from fully met.

Bibliographic Details

Main Authors:	Eichengreen, Barry, Gupta, Poonam
Format:	Working Paper biblioteca
Language:	English en_US
Published:	World Bank, Washington, DC 2016-04
Subjects:	CURRENCY MISMATCHES, MONETARY POLICY, DEFICIT, DEPOSIT, FOREIGN CAPITAL, TRADE CREDIT, CHECKS, ACCOUNTING, MONEY SUPPLIES, INTERNATIONAL CAPITAL, PUBLIC DEBTS, EQUITY FLOWS, STOCK, FISCAL DEFICITS, FOREIGN EXCHANGE MARKET, INTEREST, TRADE CREDITS, MONEY SUPPLY, EMERGING ECONOMIES, FLEXIBLE EXCHANGE RATES, INTEREST RATE, OPTION, EXCHANGE, LIQUIDITY, INTERNATIONAL FINANCIAL MARKETS, CORPORATE SECURITIES, PORTFOLIO, BANK INTEREST RATES, FISCAL POLICY, BONDS, MARKET INSTRUMENTS, CURRENCY MISMATCH, TAX, DUMMY VARIABLE, RESERVE, CENTRAL BANKS, INFLATION, INTERNATIONAL BANK, INSTRUMENTS, FINANCIAL FRAGILITY, BANK LENDING, BUDGET, CENTRAL BANK, POLICY RESPONSE, EQUITY CAPITAL, FISCAL POLICIES, TRADE BALANCE, GLOBAL ECONOMY, CURRENCY, EXCHANGE RATE MOVEMENTS, POLICY RESPONSES, PORTFOLIO CAPITAL, DEBTS, EXCHANGE RATES, CAPITAL ACCOUNT TRANSACTIONS, OPTIONS, INTEREST RATES, MONETARY FUND, FLEXIBLE EXCHANGE RATE, CAPITAL OUTFLOWS, FINANCIAL INSTITUTIONS, MARKETS, DEBT, CAPITAL MARKET, RETURN, DEFICITS, BUDGET DEFICIT, BUDGET DEFICITS, INTERNATIONAL ECONOMICS, SHORT-TERM CAPITAL, LOANS, RESERVES, BANK CREDIT, FINANCIAL SYSTEM, FINANCE, FOREIGN CURRENCY, INTERNATIONAL FINANCIAL INSTITUTIONS, TAXES, BANKING SECTOR, EXPENDITURE, TRANSACTIONS, EMERGING MARKETS, EQUITY, INVESTORS, FEDERAL RESERVE, FOREIGN EXCHANGE RESERVES, BOND MARKETS, PRIVATE SECTOR BANK, RATES OF INFLATION, INTERNATIONAL INVESTMENT, FINANCIAL CRISIS, INTERNATIONAL CAPITAL MARKET, CAPITAL MOVEMENTS, BUDGETS, DOMESTIC BANKING, BANK BALANCE SHEETS, CAPITAL FLOWS, CURRENT ACCOUNT DEFICIT, SHARES, BALANCE SHEET, REAL EXCHANGE RATE, MARKET, LOCAL CURRENCY, FOREIGN EXCHANGE, MONETARY POLICIES, SECURITIES, PUBLIC DEBT, CAPITAL INFLOW, INFLATION RATES, INSURANCE, CURRENCIES, GOVERNMENT DEBT, CURRENCY DEPRECIATION, FINANCIAL LIBERALIZATION, GOODS, SECURITY, INVESTMENT, BOND, DOMESTIC CREDIT, SHARE, BALANCE SHEETS, FINANCIAL MARKETS, POLITICAL STABILITY, BID, CAPITAL INFLOWS, REVENUE, MONEY MARKET, MONEY MARKET INSTRUMENTS, LENDING, CONSUMER PRICE INDEX, CREDIT GROWTH, CAPITAL FLOW, EXCHANGE RATE, INSTRUMENT, RISK AVERSION, PORTFOLIO FLOWS, LIABILITIES, OPEN ECONOMIES, INTERNATIONAL INVESTORS, FOREIGN EQUITY, CAPITAL ACCOUNT, FINANCIAL OPENNESS, CREDIT LINES, GUARANTEE, DEVELOPMENT BANK, POLITICAL RISK,
Online Access:	http://documents.worldbank.org/curated/en/2016/04/26219966/managing-sudden-stops https://hdl.handle.net/10986/24213
Tags:	Add Tag No Tags, Be the first to tag this record!