Sudden stops and the Mexican wave: Currency crises, capital flow reversals and output loss in emerging markets
Michael M. Hutchison,Ilan Noy +1 more
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TLDR
In this paper, the authors investigated whether sudden-stop crises are a unique phenomenon and whether they entail an especially large and abrupt pattern of output collapse (a bMexican waveQ) using a panel data set over 1975-1997 and covering 24 emerging-market economies, and distinguish between the output effects of currency crises, capital inflow reversals, and sudden stop crises.About:
This article is published in Journal of Development Economics.The article was published on 2006-02-01 and is currently open access. It has received 149 citations till now. The article focuses on the topics: Sudden stop & Currency crisis.read more
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The macroeconomic consequences of disasters
TL;DR: This paper found that countries with higher literacy rate, better institutions, higher per capita income, higher degree of openness to trade, and higher levels of government spending are better able to withstand the initial disaster shock and prevent further spillovers into the macro-economy.
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Balance Sheets and Exchange Rate Policy
TL;DR: In this article, the balance sheet effect is used to measure the value of a balance sheet, which can be defined as the sum of all the assets in a balance-sheet.
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Running for the Exit? International Bank Lending During a Financial Crisis
Ralph de Haas,Neeltje van Horen +1 more
TL;DR: This article examined how large international banks reduced their cross-border lending after the collapse of Lehman Brothers and found substantial heterogeneity in the extent to which different banks retrenched from the same country.
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The social cost of foreign exchange reserves
TL;DR: In this article, the authors show that assuming reasonable spreads between the yield on reserve assets and the cost of foreign borrowing, the income loss to these countries amounts to close to 1% of GDP, which does not seem too steep a price as an insurance premium against financial crises.
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The Optimal Level of International Reserves For Emerging Market Countries: A New Formula and Some Applications*
Olivier Jeanne,Romain Ranciere +1 more
TL;DR: This paper presented a model of the optimal level of international reserves for a small open economy seeking insurance against sudden stops in capital flows and derived a formula for the optimal amount of reserves and showed that plausible calibrations can explain reserves of the order of magnitude observed in many emerging market countries.
References
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Book
Econometric Analysis of Cross Section and Panel Data
TL;DR: This is the essential companion to Jeffrey Wooldridge's widely-used graduate text Econometric Analysis of Cross Section and Panel Data (MIT Press, 2001).
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Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations.
Manuel Arellano,Stephen Bond +1 more
TL;DR: In this article, the generalized method of moments (GMM) estimator optimally exploits all the linear moment restrictions that follow from the assumption of no serial correlation in the errors, in an equation which contains individual effects, lagged dependent variables and no strictly exogenous variables.
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Sample Selection Bias as a Specification Error
TL;DR: In this article, the bias that results from using non-randomly selected samples to estimate behavioral relationships as an ordinary specification error or "omitted variables" bias is discussed, and the asymptotic distribution of the estimator is derived.
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Specification Tests in Econometrics
TL;DR: In this article, the null hypothesis of no misspecification was used to show that an asymptotically efficient estimator must have zero covariance with its difference from a consistent but asymptonically inefficient estimator, and specification tests for a number of model specifications in econometrics.