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...

Abstract Financial crises and currency instabilities within developing and emerging economies during the last decade had a tremendous impact on the economic performance and increased vulnerability of economies against domestic and foreign shocks. The timing of capital liberalization is one of the significant debates among other issues related to currency instability, and it would be more conven...

in searching a market-neutral arbitrage strategy in forex market, we took a portfolio of three major currency pairs, eur-usd, usd-jpy, and eur-jpy. there are eight approaches, different cases of short and long positions; for example buying 1st and selling two others, etc. historical daily fx rates were gathered since january 1990 until february 2011. monthly covariances between daily growth rat...