We identify episodes of sudden stops in emerging economies and estimate the probability to
observe them. Sudden stops are more likely when global growth falters, risk aversion in
financial markets rises, and vulnerabilities in the external and financial sectors increase.
However, the significance of the explanatory variables vary across regions. In Latin America
and Eastern Europe, gross capital inflows are more responsive to changes in global growth
than in Asia. Trade linkages tend to be more important than financial linkages in Eastern
Europe, while in Asia and Latin America the opposite is true. The model captures only a
third of sudden stops outside the estimation sample, but issues reliable sudden stop signals.
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|Size: ||3.5 MB|
|Publisher: ||INTERNATIONAL MONETARY FUND|
|Date published: || 2015|
|ISBN: ||9781513516912 (DRM-EPUB)|
|Read Aloud: ||not allowed|