Fighting Against Currency Depreciation, Macroeconomic Instability, and Sudden Stops
نویسندگان
چکیده
منابع مشابه
How do Sudden Stops of Capital Flows Affect Currency Crises in Asia?
Sudden stops can be characterized by sharp reversals in capital inflows, large declines in output, and steep collapses in real asset prices (Mendoza and Smith, 2009). In almost all recent crises, capital account reversals amounting to more than 10% of an afflicted country’s GDP have occurred (Calvo and Reinhart, 1999 and Nabli, 1999). More specifically, reversals in capital flows to emergin...
متن کاملCurrency Crises and Macroeconomic Performance
Economic Group Reserve Bank of Australia We thank colleagues in Economic Research Department and Financial System Group, especially Adam Cagliarini and David Gruen, for their suggestions. Aart Kraay generously provided some of the data used in Section 2. Any errors are ours and the opinions expressed here should not be attributed to the Reserve Bank of Australia.
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Emerging economies are often exposed to sudden shortages of international financial resources. Yet domestic agents do not seem to take preventive measures against these sudden stops. We highlight the central role played by the limited development of ex ante (insurance) and ex post (spot) domestic financial markets in generating this collective undervaluation of international resources. We study...
متن کاملThe Simple Economics of Sudden Stops
The paper studies mechanisms through which a sudden stop in international credit flows may bring about financial and balance of payments crises. It is shown that these crises can occur even though the current account deficit is fully financed by foreign direct investment. However, equity and long-term bond financing may shield the economy from sudden stop crises. The paper also examines possibl...
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Using an optimizing model of a small open economy, this paper studies the macroeconomic effects of PPP rules whereby the government increases the devaluation rate when the real exchange rate—defined as the price of tradables in terms of nontradables—is below its long-run level and reduces the devaluation rate when the real exchange rate is above its long-run level. The paper shows that the mere...
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ژورنال
عنوان ژورنال: SSRN Electronic Journal
سال: 2006
ISSN: 1556-5068
DOI: 10.2139/ssrn.875369