The Persistence of Capital Account Crises

By Mauro Mecagni, Ruben V Atoyan, David J Hofman

May 1, 2009

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Format: Chicago

Mauro Mecagni, Ruben V Atoyan, and David J Hofman. The Persistence of Capital Account Crises, (USA: International Monetary Fund, 2009) accessed September 19, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

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.

Subject: Balance of payments, Capital account crisis, Exchange rate arrangements, External debt, Financial crises, Financial services, Foreign exchange, Real interest rates

Keywords: A. crisis persistence, Balance sheets, Capital account crises, Capital account crisis, Crisis, Crisis complexity, Crisis duration, Crisis prevention effort, Debt, Exchange rate, Exchange rate arrangements, Global, IMF financing, Persistence, Real interest rates, WP

Publication Details

Pages:

28
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2009/103
Stock No:

WPIEA2009103
ISBN:

9781451872507
ISSN:

1018-5941

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