Sudden Stops: Determinants and Output Effects in the First Era of Globalization, 1880-1913
Michael Bordo (),
Alberto Cavallo and
Christopher Meissner ()
No 13489, NBER Working Papers from National Bureau of Economic Research, Inc
Using a sample of 20 emerging countries from 1880 to 1913, we study the determinants and output effects of sudden stops in capital inflows during an era of intensified globalization. We find that higher levels of original sin (hard currency debt to total debt) and large current account deficits associated with reliance on foreign capital greatly increased the likelihood of experiencing a sudden stop. Trade openness and stronger commitment to the gold standard had the opposite effect. These results are robust for many sudden stop definitions used in the literature. Finally, we use a treatment effects model to show that after controlling for endogeneity sudden stops have a strong negative association with growth in per capita output. We also show that banking, currency and debt crises that were preceded by a sudden stop have much greater negative relation with growth than in the absence of a sudden stop.
JEL-codes: F21 F32 N1 N10 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-his and nep-int
Note: DAE IFM
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed
Published as Bordo, Michael D. & Cavallo, Alberto F. & Meissner, Christopher M., 2010. "Sudden stops: Determinants and output effects in the first era of globalization, 1880-1913," Journal of Development Economics, Elsevier, vol. 91(2), pages 227-241, March.
Downloads: (external link)
Journal Article: Sudden stops: Determinants and output effects in the first era of globalization, 1880-1913 (2010)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: /RePEc:nbr:nberwo:13489
Ordering information: This working paper can be ordered from
Access Statistics for this paper
More papers in NBER Working Papers from National Bureau of Economic Research, Inc
Address: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Contact information at EDIRC.
Series data maintained by ().