The ominous facts are well known – the strongest predictors of financial crises are domestic credit booms and external debts (Reinhart and Rogoff 2011). In emerging markets, credit booms are generally preceded by large capital inflows (Reinhart and Reinhart 2010).
The next sudden stop
Sebnem Kalemli-Ozcan, 7 January 2014
The mother of all sudden stops: Capital flows and reversals in Europe, 1919-1932
Olivier Accominotti, Barry Eichengreen, 14 September 2013
From 2001 through 2008 one half of Europe received enormous capital inflows from the other half of Europe and the rest of the world.
A new taxonomy of Sudden Stops: Which Sudden Stops should countries be most concerned about?
Eduardo Cavallo, Andrew Powell, 30 August 2013
Emerging markets have slowed alongside a rise in longer term US rates. The fear of ‘sudden stops’ in capital flows has risen. The academic literature on capital flows, perhaps as in other areas, has tended to focus on contemporaneous concerns:
Sudden stops in the Eurozone
Jean Pisani-Ferry, Silvia Merler, 2 April 2012
Many analysts and observers have put forward that the euro crisis is a balance-of-payments crisis at least as much as a fiscal crisis (e.g. Carney 2012, Giavazzi and Spaventa 2011, Sinn 2012, Wolf 2011).
The G20 communiqué: Work in progress but good news for emerging markets
Guillermo Calvo, 6 April 2009
From the perspective of Financial Architecture, the G20 communiqué represents a major and positive change in the way world leaders view financial crises. They have definitely moved from a view according to which crises are largely homegrown, to a view that allows for the existence of systemic crises, chain-reaction accidents involving many innocent bystanders.
Lender of last resort: Put it on the agenda!
Guillermo Calvo, 23 March 2009
The subprime crisis is a massive failure of the shadow banking system that has affected all corners of the capital market and triggered worldwide deleveraging. We are in a severe credit crunch. Savers distrust private-sector dissavers, which gives rise to a fall in aggregate demand and a search for safe assets (“flight to quality”).
- A tale of two depressions: What do the new data tell us? February 2010 updateEichengreen, O’Rourke
- Educated in America: College graduates and high school dropoutsHeckman, LaFontaine
- Eurozone breakup would trigger the mother of all financial crisesEichengreen
- Panic-driven austerity in the Eurozone and its implicationsDe Grauwe, Ji
- Debt, deleveraging, and the liquidity trap: A new modelKrugman
Cadot, de Melo, 16 June 2014