Emerging markets are going through another period of volatility – and the most popular boogeyman is the US Federal Reserve.
Turmoil in emerging markets: What’s missing from the story?
Kristin Forbes, 5 February 2014
Why fiscal sustainability matters
Willem Buiter, 10 January 2014
Does fiscal sustainability matter only when there is a fiscal house on fire, as was the case with the Greek sovereign insolvency in 2011–12? Far from it.
Topics: Financial markets, Global crisis, International finance, Macroeconomic policy
Tags: balance-sheet recession, banking, banking union, banks, capital flows, credit booms, Currency wars, emerging markets, eurozone, Eurozone crisis, financial crisis, fiscal policy, fiscal sustainability, global financial crisis, sovereign debt, sovereign debt restructuring
The next sudden stop
Sebnem Kalemli-Ozcan, 7 January 2014
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).
Investment in the wake of crises: Asia 15 years later
Carmen M Reinhart, Takeshi Tashiro, 17 December 2013
However straightforward the role of investment as a shock absorber in a time of crisis, it is perplexing why it takes so many years to recover afterwards – if it recovers at all. A prolonged investment slump is not a new phenomenon following a deep crisis.
Capital inflows and booms in asset prices: Going beyond the current account
Eduardo Olaberría, 7 December 2013
For decades, policymakers’ perception has been that large capital inflows can fuel booms in asset prices. If this were true, bonanzas in capital inflows would imply an important risk to financial stability, since booms in asset prices are leading indicators of financial crises.
The impossible trinity, yet again
Stephen Grenville, 26 November 2013
Starting point of the impossible trinity
Should Brazil’s central bank be selling foreign reserves?
Márcio Garcia, 25 September 2013
The US dollar’s rise in August and the Brazilian Central Bank’s (BCB) interventions in forex markets have started a debate about whether the BCB should keep on intervening as it has been doing, mostly via currency derivatives markets, or if it should also be selling its international reserves.
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:
Why does capital flow from poor to rich countries?
Daniel Gros, 26 August 2013
Almost a quarter of a century ago, Robert Lucas posed the simple question: “Why does capital flow from poor to rich countries?” (Lucas 1990).
Not all capital waves are alike: A sector-level examination of surges in FDI inflows
Dennis Reinhardt, Salvatore Dell'Erba, 8 July 2013
Capital flows often come in waves. An extensive literature has documented 'surges' and 'bonanzas' in capital flows (e.g. Forbes and Warnock 2012, Reinhart and Reinhart 2009, Ghosh et al. 2012). While capital flows can bring many benefits the literature has also documented the risks associated with this cyclical nature.
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- 13th Summer School in International Development Economics: Investment, Saving and Wellbeing in Developing Countries10 - 13 June 2014 / Palazzo Feltrinelli, Gargnano, Lake Garda (Italy) / Organisers: Centro Studi Luca d’Agliano, Centre for Economic Policy Research (CEPR), Paolo Baffi Center on International Markets, Money and Regulation, Department of Economics, Management and Quantitative Methods of the University of Milan, Department of Economics, Quantitative Methods and Business Strategies of the University of Milan Bicocca, Vilfredo Pareto Doctoral Program in Economics of the University of Turin, The Lombardy Advanced School of Economic Research (LASER).
- 3rd WB-BE Research Conference: Financing growth: Levers, Boosters and Brakes23 - 24 June 2014 / Banco de España headquarters in Madrid / This conference is sponsored by Banco de España and The World Bank