Systemic Sudden Stops: The Relevance of Balance-Sheet Effects and Financial Integration

Guillermo Calvo, Alejandro Izquierdo and Luis Fernando Mejía

No 4581, Research Department Publications from Inter-American Development Bank, Research Department

Abstract: Using a sample of 110 developed and developing countries for the period 1990-2004, this paper analyzes the characteristics of systemic sudden stops (3S) in capital flows and the relevance of balance-sheet effects in the likelihood of their materialization. A small supply of tradable goods relative to their domestic absorption?a proxy for potential changes in the real exchange rate?and large foreign-exchange denominated debts towards the domestic banking system are claimed to be key determinants of the probability of 3S, producing a balancesheet effect with non-linear impacts on the probability of 3S. While financial integration is up to a point associated with a higher likelihood of 3S, beyond that point financial integration is associated with a lower likelihood of 3S.

Date: 2008-07
New Economics Papers: this item is included in nep-dev and nep-opm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (205)

Downloads: (external link)
http://www.iadb.org/research/pub_hits.cfm?pub_id=W ... e_name=pubWP-637.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.iadb.org/research/pub_hits.cfm?pub_id=WP-637&pub_file_name=pubWP-637.pdf [301 Moved Permanently]--> https://www.iadb.org/research/pub_hits.cfm?pub_id=WP-637&pub_file_name=pubWP-637.pdf)

Related works:
Working Paper: Systemic Sudden Stops: The Relevance of Balance-Sheet Effects and Financial Integration (2008)
Working Paper: Systemic Sudden Stops: The Relevance Of Balance-Sheet Effects And Financial Integration (2008)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:idb:wpaper:4581

Access Statistics for this paper

More papers in Research Department Publications from Inter-American Development Bank, Research Department Contact information at EDIRC.
Bibliographic data for series maintained by Felipe Herrera Library ().