Sudden Flight and True Sudden Stops

Alexander Rothenberg and Francis Warnock

The Institute for International Integration Studies Discussion Paper Series from IIIS

Abstract: We extend the sudden stops literature by allowing crisis episodes to be caused by either the retreat of global investors, as is assumed but not shown in the extant literature, or the sudden flight of local investors. We find that almost half of the previously defined sudden stops are actually episodes of sudden flight. Compared to sudden flight, true sudden stops are bunched and are associated with greater slowdowns in economic activity and sharper currency depreciations. We show that the empirical regularities of sudden flight and true sudden stops are consistent with theoretical models that incorporate gross capital flows and information asymmetries.

Keywords: international capital flows; capital flight; emerging market crises (search for similar items in EconPapers)
Date: 2007-01-05
Note: Length:
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://www.tcd.ie/triss/assets/PDFs/iiis/iiisdp187.pdf (application/pdf)

Related works:
Journal Article: Sudden Flight and True Sudden Stops (2011)
Working Paper: Sudden Flight and True Sudden Stops (2006)
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:iis:dispap:iiisdp187

Access Statistics for this paper

More papers in The Institute for International Integration Studies Discussion Paper Series from IIIS 01. Contact information at EDIRC.
Bibliographic data for series maintained by Maeve ().