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When Capital Inflows Come to a Sudden Stop: Consequences and Policy Options

dc.contributor.authorCalvo, Guillermo A.
dc.contributor.authorReinhart, Carmen M.
dc.date.accessioned2007-02-16T20:34:54Z
dc.date.available2007-02-16T20:34:54Z
dc.date.issued1999-06-29
dc.identifier.urihttp://hdl.handle.net/1903/4293
dc.description.abstractIn this paper we present evidence that capital account reversals have become more severe for emerging markets. Because policy options are limited in the midst of a capital market crisis and because so many countries have already had crises recently, we focus on some of the policies that could reduce the incidence of crises in the first place, or at least make the sudden stop problem less severe. In this regard, we consider the relative merits of capital controls and dollarization. We conclude that, while the evidence suggests that capital controls appear to influence the composition of flows skewing flows away from short maturities, such policies are not likely to be a long-run solution to the recurring problem of sudden capital flow reversals. Yet, because fear of floating, many emerging markets are likely to turn to increased reliance on controls. Dollarization would appear to have the edge as a more marketoriented option to ameliorate, if not eliminate, the sudden stop problem.en
dc.format.extent99412 bytes
dc.format.mimetypeapplication/pdf
dc.language.isoen_USen
dc.subjectcapital account reversalsen
dc.subjectemerging marketsen
dc.subjectcapital market crisisen
dc.subjectdollarizationen
dc.subjectcapital controlsen
dc.subjectcapital flow reversalsen
dc.titleWhen Capital Inflows Come to a Sudden Stop: Consequences and Policy Optionsen
dc.typeArticleen
dc.relation.isAvailableAtDigital Repository at the University of Marylanden_us
dc.relation.isAvailableAtEconomics Departmenten_us
dc.relation.isAvailableAtCollege of Behavioral and Social Sciencesen_us
dc.relation.isAvailableAtUniversity of Maryland (College Park, Md.)en_us


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