Description

This study contributes to the literature on capital account crises in two ways. First, our analysis of crisis episodes between 1994 and 2002 establishes a clear relationship between the persistence of crises, their complexity, and the intensity of movement of key macroeconomic variables. Second, we provide a systematic examination of the determinants of crisis duration. Our econometric analysis suggests that initial conditions and the external environment plays a key role in determining crisis persistence. The policy response also matters, but cannot offset a record of poor past policies. Overall, the results underscore the critical importance of crisis prevention efforts.

Taxonomy

Balance of payments , Capital account , Capital markets , Economic policy , Financial crisis , Financial institutions and markets , Fiscal policy , International financial system , Monetary policy

More publications in this series: Working Papers

More publications by: Mauro Mecagni ; Ruben Atoyan ; David Hofman