## Net Foreign Capital Inflows

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---

### Introduction and scope
- Study covers a new international data set on capital flows and related macro variables spanning 16 countries since 1870 through the eve of World War I.
- Historical markers: the advent of the transatlantic telegraph in 1866 and a pre–World War I international monetary system with widespread gold pegs.
- Motivation: document historical evidence on "sudden stops" (SSs) and their links to currency drops and output downturns, and compare pre-WWI patterns with post-1970 evidence.

### Working definition of a sudden stop (SS)
- An SS is defined as:
  - a drop (from peak to trough) of no less than two standard deviations of the deviations of respective series from a linear trend, and/or
  - any drop that exceeds 3 percent of GDP over a period shorter than four years.
- Timing: SS begins in the year when capital inflows peak and ends in the year when flows start rising relative to trend without falling back to the trough within a four-year window.

### Historical patterns and timing of SSs
- Major synchronized downswings observed across most countries in:
  - 1874–80,
  - the early 1890s,
  - 1906–08.
- Specific case: Argentina’s major SS of 1889–94 is closely associated with the Baring crisis.
- Evidence from gross portfolio calls on London broadly corroborates net-flow patterns for many countries, particularly Latin America and the Anglo-Saxon new world.
- Some country-specific divergences exist (e.g., Norway and Russia in the early 1890s; Russia shows discrepancies between gross and net series).

### Magnitude and duration of SSs (key statistics)
- Absolute annual deviations from a balanced capital account (average over the whole period):
  - Argentina: 10 percent of GDP,
  - Canada: 7½ percent of GDP,
  - Finland: 6¼ percent of GDP,
  - Australia: 5½ percent of GDP.
- Pooled across all SS events with available NFKI series:
  - Peak-to-trough median drop in inflows: 5.1 percent of GDP.
  - Comparable figure from more recent SS literature: 4.9 percent.
  - Average duration of SSs over the whole panel: four years.
  - Median duration noted as persistent (median values reported elsewhere in the paper).

### Cross-country synchronicity and drivers
- Time bunching of SSs is evident (mid-1870s, early 1890s, 1906–07, and to a lesser extent late 1890s).
- SS incidence series is broadly consistent with net capital outflow series from Britain, France, and Germany.
- Many SSs were preceded by a one- or two-year lag of hikes in core central banks’ discount rates, implicating exogenous monetary tightening in core countries as a “push factor” for capital flow reversals.

### Exchange rate regimes, fiscal positions, and differential outcomes
- SSs affected countries across wide income and regime spectra:
  - Examples of per capita GDP in 1913 (constant 1990 PPP): Brazil US$ 811; United States US$ 5,301.
  - Monetary regimes varied: continuous gold pegs, bimetallism, temporary gold pegs, inconvertible paper money; none guaranteed immunity from SSs.
- Fiscal discipline varied markedly:
  - Scandinavian public debt averaged between 15 and 20 percent of GDP during 1870–1913.
  - United States public-debt-to-GDP ratio averaged 9 percent and fell to a low around 3 percent by the eve of World War I.
  - Other countries (Argentina, Chile, Greece, Italy, Portugal, Spain) had much higher period averages.
- Implication: fiscal and institutional differences may help explain heterogeneous exchange rate and output responses to SSs.

### Empirical comparisons and robustness
- Net and gross flow measures yield broadly similar pictures of SS timing in most countries, though measurement issues arise for some (e.g., Russia, Southern Europe).
- Standard tests show:
  - No statistically significant difference in mean magnitude of SSs between fixers (gold-peggers) and floaters when outliers are accounted for (reported means: floating group mean 10.3 percent; gold-peggers mean 5.6 percent; dropping Argentina 1890–92 outlier reduces off-gold group mean to 5.1 percent).
  - No statistically significant difference in duration of SSs between gold and non-gold country groups; SSs are persistent in both cases.
- Reported z-statistics and thresholds:
  - z-statistic for differences in mean: 0.99, well below the 10 and 5 percent critical threshold levels of 1.64 and 1.96.
  - The respective z-statistic is 0.69 (computed with specific series adjustments).

### Econometric determinants of currency crashes
- Currency crash definition (probit): exchange rate depreciation greater than at least one standard deviation of the annual percentage change of the nominal exchange rate (relative to sterling) over 1870–1913, not fully reversed within a three-year window. This yields 19 such events in the sample (reduced to 18 in probit estimation due to missing covariates for Russia in the 1870s).
- Baseline probit results (Table 2 highlights):
  - ∆ ln(M2)t is a main determinant: a 1 percentage point increase in M2 growth increased the likelihood of a currency crash by 3.4 percentage points.
  - The ratio of government expenditure to revenues measured relative to its log-linear trend ("g/t gap") is a significant positive predictor.
  - Changes in the supply of foreign capital ("World K flows") net of changes in reserves-to-currency ("res/Mo") are significant predictors.
  - The relative productivity differential (ln(yreal/n) − ln(yreal*/n*)) is significant with the expected negative sign but with a smaller estimated elasticity.
  - The terms-of-trade gap, output growth [ln()Yreal∆], and the interest rate differential (i−i*) were statistically insignificant in the baseline; replacing (i−i*) with the foreign interest rate i* yields a positive and significant effect of i* at 10 percent in some specifications.
- Model performance:
  - Pseudo R-squared of about 0.5.
  - The model correctly predicts some 98 percent of events using a cut-off of predicted likelihood > 50 percent.
  - Using a lower cut-off of 20 percent, the model correctly predicts 11 of the 18 crash events in the sample.
- Robustness checks:
  - Ratio of external public debt to exports is statistically insignificant and has the opposite sign to theoretical prediction.
  - Ratio of total public debt to GDP is insignificant.
  - Ratio of external to total public debt is positive but small and not statistically significantly different from zero.
  - Trade imbalances (log of exports to imports) do not add significant explanatory power.

### Domestic financial imperfections and procyclical behavior (empirical patterns)
- Financial structure characteristics in currency-crash countries:
  - Shallower financial markets (fewer banks and lower bank capitalization per capita; lower broad money and domestic bank credit to GDP).
  - Poor bank regulation, multiple issuing banks, and lack of a national bank acting as lender of last resort.
- Implications:
  - Borrowers were credit constrained, so outward shifts in external supply of funds translated into faster credit growth.
  - Lending was more responsive to current collateral values (procyclical credit expansion).
  - Illiquid domestic markets made fire sales and bank runs more likely when capital flows dried up.
  - Decentralized note-issuing and deficient regulations reduced specie backing of bank notes, amplifying monetary expansion effects on the exchange rate.
- Country examples and measures:
  - Argentina: M2/GDP rose from 28 to 65 percent of GDP between 1880 and 1889 while real GDP nearly tripled.
  - Brazil: broad money to GDP ratio roughly doubled between 1889 and 1891 following lifting of issuance controls.
  - Chile, Portugal, and Spain: elasticity of broad money to income rose well above unity in the two to three years prior to the 1890–92 crashes.
  - M2 multiplier is noticeably more cyclical in crisis countries (Figure 8).
- Fiscal patterns:
  - Currency-crash countries tended to have higher average ratios of public expenditures to revenues; three worst cases (Argentina, Chile, Greece) had the highest averages.
  - Average ratio of expenditure to revenues in the currency-crash group was around 10 percent higher than in the non-crash group.
  - Average ratio of debt to GDP was 85 percent in crash countries versus 38 percent in non-crash ones.
  - Fiscal policy was more procyclical in crash countries: mean fiscal procyclicality coefficients 0.982 versus 0.508 for non-crash countries (Table 3 means).
  - Fiscal spending was more responsive to international capital inflow cycles in crash countries: group averages 0.066 and 0.057 for crash countries versus 0.001 and 0.001 for non-crash countries (Table 3 columns (3)–(4)).
- Reserve coverage:
  - Non-crash countries entered the capital inflow cycle with roughly twice as high reserve coverage as crash-prone counterparts (median comparisons: 56 percent versus 25 percent in the year just before the SS).
  - In crash countries reserve coverage fell from 38 to 17 percent between t = −1 and t = 3 around the SS.

### Policy implications and lessons
- Deep financial markets, exchange rate flexibility, and high precautionary reserve buffers help mitigate SS side-effects but do not prevent SSs.
- Country-specific fiscal and monetary management and resilience of domestic banking systems are critical to avoid SSs degenerating into disruptive currency crashes.
- Fiscal and monetary procyclicality (e.g., government expenditure growing faster than the tax base during upswings) heightens currency risk and reserve losses when capital inflows reverse.
- Additional implications:
  - Country insurance-type contracts between net capital exporters and net capital importers may be more effective given time bunching of SSs.
  - High international reserve coverage of domestic monetary liabilities when world interest rates start rising is important to minimize the risk of abrupt, contractionary currency drops—underscoring precautionary reserve accumulation during upswings.

### Data sources and country coverage (summary from Appendix II)
- Data combine net capital inflow series for some countries and Stone (1999) gross portfolio calls on the London market as a proxy for gross inflows.
- Country-level data sources and specific measurement notes are documented for Argentina, Chile, Greece, Italy, Portugal, Russia, Spain, Australia, Canada, Denmark, Finland, New Zealand, Norway, Sweden, United States, and European core countries (bank rates and capital exports).
- Notable dataset and source mentions: Stone (1999); Jones and Obstfeld (2001); Mitchell (various years); Maddison (2003); country-specific archival and secondary sources listed in Appendix II.

*Italic: Source — _wp06133 - 1.     Net Foreign Capital Inflows (excerpt) from the provided PDF content.*

### 1.     Net Foreign Capital Inflows......................................................................................

### 1. Net Foreign Capital Inflows

### Introduction and scope
- Study covers a new international data set on capital flows and related macro variables spanning 16 countries since 1870 through the eve of World War I.
- Relevant historical markers: the advent of the transatlantic telegraph in 1866 and a pre–World War I international monetary system with widespread gold pegs.
- Motivation: document historical evidence on "sudden stops" (SSs) and their links to currency drops and output downturns, and compare pre-WWI patterns with post-1970 evidence.

### Research questions
- Do SSs hit capital-importing economies irrespective of development level and monetary regime?
- How large are SSs relative to recipient economies, and what is their average duration?
- Do SSs display cross-country synchronicity (time bunching) or are they mostly idiosyncratic?
- Is there a systematic relationship between SSs and shifts in monetary policy and interest rates in main capital-exporting countries?

### Data sources and measurement choices
- Combination of net capital inflow series (available for a subset of countries) and Stone (1999) data on gross portfolio calls on the London market to proxy gross inflows.
- Rationale: Britain was the largest capital-exporting nation and London bond flotations were the main external financing instrument for many capital importers.
- Note on net vs gross: net capital inflow drops can arise mechanically from terms-of-trade improvements; the SS concept ideally refers to sudden drops in external financing supply that the current account must absorb.

### Working definition of a sudden stop (SS) used in the analysis
- An SS is defined as:
  - a drop (from peak to trough) of no less than two standard deviations of the deviations of respective series from a linear trend, and/or
  - any drop that exceeds 3 percent of GDP over a period shorter than four years.
- Timing: SS begins in the year when capital inflows peak and ends in the year when flows start rising relative to trend without falling back to the trough within a four-year window.

### Historical patterns and timing of SSs
- Major synchronized downswings observed across most countries in:
  - 1874–80,
  - the early 1890s,
  - 1906–08.
- Specific case: Argentina’s major SS of 1889–94 is closely associated with the Baring crisis.
- Evidence from gross portfolio calls on London broadly corroborates net-flow patterns for many countries, particularly Latin America and the Anglo-Saxon new world.
- Some country-specific divergences exist (e.g., Norway and Russia in the early 1890s; Russia shows discrepancies between gross and net series).

### Magnitude and duration of SSs
- Absolute annual deviations from a balanced capital account (average over the whole period):
  - Argentina: 10 percent of GDP,
  - Canada: 7½ percent of GDP,
  - Finland: 6¼ percent of GDP,
  - Australia: 5½ percent of GDP.
- Pooled across all SS events with available NFKI series:
  - Peak-to-trough median drop in inflows: 5.1 percent of GDP.
  - Comparable figure from more recent SS literature: 4.9 percent.
  - Average duration of SSs over the whole panel: four years.
  - Median duration noted as persistent (median values reported elsewhere in the paper).

### Cross-country synchronicity and drivers
- Time bunching of SSs is evident (mid-1870s, early 1890s, 1906–07, and to a lesser extent late 1890s).
- SS incidence series is broadly consistent with net capital outflow series from the three main capital-exporting countries: Britain, France, and Germany.
- Many SSs were preceded by a one- or two-year lag of hikes in core central banks’ discount rates, implicating exogenous monetary tightening in core countries as a “push factor” for capital flow reversals.

### Exchange rate regimes, fiscal positions, and differential outcomes
- SSs affected countries across wide income and regime spectra:
  - Examples of per capita GDP in 1913 (constant 1990 PPP): Brazil US$ 811; United States US$ 5,301.
  - Some countries remained on a gold peg throughout while others used bimetallism, temporary gold pegs, or inconvertible paper money; none of these regimes guaranteed immunity from SSs.
- Fiscal discipline varied markedly:
  - Scandinavian public debt averaged between 15 and 20 percent of GDP during 1870–1913.
  - United States public-debt-to-GDP ratio averaged 9 percent and fell to a low around 3 percent by the eve of World War I.
  - Other countries (Argentina, Chile, Greece, Italy, Portugal, Spain) had much higher period averages.
- Implication: fiscal and institutional differences may help explain heterogeneous exchange rate and output responses to SSs.

### Empirical comparisons and robustness
- Net and gross flow measures yield broadly similar pictures of SS timing in most countries, though measurement issues arise for some (e.g., Russia, Southern Europe).
- Standard tests show:
  - No statistically significant difference in mean magnitude of SSs between fixers (gold-peggers) and floaters when outliers are accounted for. (Reported means: floating group mean 10.3 percent; gold-peggers mean 5.6 percent; dropping Argentina 1890–92 outlier reduces off-gold group mean to 5.1 percent.)
  - No statistically significant difference in duration of SSs between gold and non-gold country groups; SSs are persistent in both cases.

### Key empirical takeaways
- Pre–World War I sudden stops were sizable and often synchronized across many capital-importing countries.
- Median peak-to-trough drop in net inflows: 5.1 percent of GDP.
- Average SS duration: four years.
- Many SSs were preceded by hikes in core discount rates with a one- or two-year lag, indicating a role for monetary “push” factors from major capital exporters.
- SSs affected countries across income levels and monetary regimes; institutional and fiscal factors mattered for exchange rate responses and crisis management choices.

*Italic: Source — _wp06133 - 1.     Net Foreign Capital Inflows (excerpt) from the provided PDF content.*

### 4.2 years, respectively, and again no statistically significant difference in means.

### _wp06133 - 4.2 years, respectively, and again no statistically significant difference in means.

### Evidence on exchange rate fixing and capital inflows
- The evidence calls into question the view that fixing the exchange rate was a sine qua non condition for attracting and/or stabilizing capital inflows.
- The fact that SSs also struck other gold-pegged countries with histories of sensible macro policies suggests that neither the monetary regime nor the fiscal policy stance can insulate a country from a capital account shock.
- This evidence has striking parallels to that amassed by Calvo, Izquierdo, and Mejía (2004) who find that neither differences in monetary regimes nor country-specific fiscal behavior can explain the incidence of SSs in their sample of 32 countries over 1990–2001.

### Capital flows and currency crashes: diversity of monetary arrangements
- Despite the rapid international spread of the gold standard from the 1870s and continued pegs by core industrial nations until the eve of World War I, many capital-importing countries operated distinct monetary regimes.
- Observed country behaviors included:
  - Repeated switches between a gold peg and a floating regime (examples: Argentina, Brazil, Chile, and Greece).
  - Postponement of gold standard membership until substantial gold reserves were accumulated, facilitating uninterrupted adherence to the peg (examples: India, Japan, and Russia from 1897).
  - Countries that never pegged to gold (China and Spain).
  - Portugal: adopted gold much earlier (1856) but left earlier (1891).
  - Austria-Hungary and Italy: formally off-gold during much of the period but national monetary authorities successfully shadowed the gold parity, resulting in relative exchange rate stability.

### Exchange rate behavior and volatility
- Anglo-Saxon and Scandinavian currencies were kept within the narrow gold points and thus were virtually flat.
- Other countries exhibited wide variation in the price of the domestic currency relative to gold and to core-country currencies.

### Statistical notes and durations
- Sample duration comparison referenced "4.2 years, respectively," with no statistically significant difference in means.
- Reported z-statistics and critical thresholds:
  - z-statistic for differences in mean: 0.99, well below the 10 and 5 percent critical threshold levels of 1.64 and 1.96.
  - The respective z-statistic is 0.69 (computed with specific series adjustments).
- In computing the 0.69 statistic, the duration of SSs in Greece, Portugal, and New Zealand (countries for which a NFKI series is unavailable), as well as in Argentina and Russia prior to 1880, was measured using gross capital inflow series as reported in Table 1.

### Historical episode examples (selected dates preserved exactly as in source)
- Argentina stabilized its exchange rate and held onto a gold peg in 1870–75, 1883–84, and 1899–1913.
- Brazil was on gold for a few months between 1888 and 1889 and from 1906 to

*Source: _wp06133 - 4.2 years, respectively, and again no statistically significant difference in means.*

### 1913. Chile was on a bimetallic standard through 1879 and on gold between 1895 and 1898.

### _wp06133 - 1913. Chile was on a bimetallic standard through 1879 and on gold between 1895 and 1898.

### Main findings
- All net capital-importing countries with available annual data experienced sporadic but often large and abrupt reversals in foreign capital inflows during 1870–1913 ("sudden stops" or SSs).
- The average magnitude of drops in net foreign capital inflows during SS episodes was about 5 percent of GDP (measured peak-to-trough).
- The average time for capital inflows to fully recover after an SS was four years.
- SSs were time-bunched around the early to mid 1870s, the early 1890s, and 1906–07.
- Preceding hikes in central bank discount rates in core capital-exporting countries were a common factor across SS episodes, typically with a one- to two-year lag.

### Empirical evidence and model
- A reduced-form equation for expected parity deviations of the spot exchange rate is derived from monetary models extended to allow for a time-varying country risk premium and violations to long-run PPP (Appendix I).
- The country risk premium is modeled as a function of the supply of international liquidity (the "push" of capital exports) net of offsetting changes in international reserves relative to currency in circulation.
- Probit estimation: a currency crash is defined as an exchange rate depreciation greater than at least one standard deviation of the annual percentage change of the nominal exchange rate (relative to sterling) over 1870–1913, not fully reversed within a three-year window. This yields 19 such events in the sample (reduced to 18 in probit estimation due to missing covariates for Russia in the 1870s).

### Determinants of currency crashes (econometric results)
- Baseline probit results (Table 2):
  - ∆ ln(M2)t is a main determinant: a 1 percentage point increase in M2 growth increased the likelihood of a currency crash by 3.4 percentage points.
  - The ratio of government expenditure to revenues measured relative to its log-linear trend ("g/t gap") is a significant positive predictor.
  - Changes in the supply of foreign capital ("World K flows") net of changes in reserves-to-currency ("res/Mo") are significant predictors.
  - The relative productivity differential (ln(yreal/n) − ln(yreal*/n*)) is significant with the expected negative sign but with a smaller estimated elasticity.
  - The terms-of-trade gap, output growth [ln()Yreal∆], and the interest rate differential (i−i*) were statistically insignificant in the baseline; replacing (i−i*) with the foreign interest rate i* yields a positive and significant effect of i* at 10 percent in some specifications.
- Model performance:
  - Pseudo R-squared of about 0.5.
  - The model correctly predicts some 98 percent of events using a cut-off of predicted likelihood > 50 percent.
  - Using a lower cut-off of 20 percent, the model correctly predicts 11 of the 18 crash events in the sample.
- Robustness checks (columns (5)–(8) of Table 2):
  - Ratio of external public debt to exports is statistically insignificant and has the opposite sign to theoretical prediction.
  - Ratio of total public debt to GDP is insignificant.
  - Ratio of external to total public debt (an indicator of currency mismatch) is positive but small and not statistically significantly different from zero.
  - Trade imbalances (log of exports to imports) do not add significant explanatory power.

### Domestic financial imperfections and procyclical behavior
- Financial structure characteristics in currency-crash countries:
  - Shallower financial markets (fewer banks and lower bank capitalization per capita; lower broad money and domestic bank credit to GDP).
  - Poor bank regulation, multiple issuing banks, and lack of a national bank acting as lender of last resort.
- Implications of financial structure:
  - Borrowers were credit constrained, so outward shifts in external supply of funds translated into faster credit growth.
  - Lending was more responsive to current collateral values (procyclical credit expansion).
  - Illiquid domestic markets made fire sales and bank runs more likely when capital flows dried up.
  - Decentralized note-issuing and deficient regulations reduced specie backing of bank notes, amplifying monetary expansion effects on the exchange rate.
- Empirical patterns:
  - Argentina: M2/GDP rose from 28 to 65 percent of GDP between 1880 and 1889 while real GDP nearly tripled.
  - Brazil: broad money to GDP ratio roughly doubled between 1889 and 1891 following lifting of issuance controls.
  - Chile, Portugal, and Spain: elasticity of broad money to income rose well above unity in the two to three years prior to the 1890–92 crashes.
  - M2 multiplier (money multiplier) is noticeably more cyclical in crisis countries (Figure 8).
- Fiscal behavior:
  - Currency-crash countries tended to have higher average ratios of public expenditures to revenues; three worst cases (Argentina, Chile, Greece) had the highest averages.
  - Average ratio of expenditure to revenues in the currency-crash group was around 10 percent higher than in the non-crash group.
  - Average ratio of debt to GDP was 85 percent in crash countries versus 38 percent in non-crash ones.
  - Fiscal policy was more procyclical in crash countries: mean fiscal procyclicality coefficients 0.982 versus 0.508 for non-crash countries (Table 3 means).
  - Fiscal spending was also more responsive to international capital inflow cycles in crash countries (Table 3 columns (3)–(4) group averages: 0.066 and 0.057 for crash countries versus 0.001 and 0.001 for non-crash countries).
- Reserve coverage:
  - Non-crash countries entered the capital inflow cycle with roughly twice as high reserve coverage as crash-prone counterparts (median comparisons: 56 percent versus 25 percent in the year just before the SS).
  - In crash countries reserve coverage fell from 38 to 17 percent between t = −1 and t = 3 around the SS.

### Policy implications and lessons
- Deep financial markets, exchange rate flexibility, and high precautionary reserve buffers help mitigate SS side-effects but do not prevent SSs.
- Country-specific fiscal and monetary management and resilience of domestic banking systems are critical to avoid SSs degenerating into disruptive currency crashes.
- Fiscal and monetary procyclicality (e.g., government expenditure growing faster than the tax base during upswings) heightens currency risk and reserve losses when capital inflows reverse.
- Two additional policy implications:
  - Country insurance-type contracts between net capital exporters and net capital importers may be more effective given time bunching of SSs.
  - High international reserve coverage of domestic monetary liabilities when world interest rates start rising is important to minimize the risk of abrupt, contractionary currency drops—underscoring precautionary reserve accumulation during upswings.

*Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2006/_wp06133.pdf*

### APPENDIX II

### APPENDIX II

### Data categories and country-specific sources

- Argentina
  - Money: M0 and M2 both from IBGE (1986).
  - Exchange Rate: IBGE (1986).
  - Domestic Interest Rate: kindly provided by Bill Summerhill and Gail Triner based on primary data on domestic prices of 5 percent and 6 percent domestic perpetual bonds (“polices”).
  - Domestic Price Index: see Catão and Solomou (2005).
  - GDP: Contador and Haddad (1975). 1900–1913 from Haddad (1978).
  - Population: Maddison (2003).

- Chile
  - Net Foreign Capital Inflow: Derived by difference between changes in specie reserves in the banking system and the external current account balance estimated in Braun and others (2000).
  - Foreign Trade and External Terms of Trade: Braun and others (2000).
  - Specie Reserves: Llona Rodriguez (1990).
  - Central Government Expenditures and Revenues: Braun and others (2000).
  - Central Government Debt: Braun and others (2000).
  - Money: 1870–78: M0 based on outstanding bank notes from Llona Rodriguez (1990), Tables 73 and 75, then spliced with the currency in circulation series provided in Mitchell (1998). M2 adds total deposits to these series using Llona Rodriguez’s estimates provided in the same source.
  - Exchange Rate: Braun and others (2000).
  - Domestic Interest Rate: short-term average loan interest rate charged by domestic banks from Braun and others (2000).
  - Domestic Price Index: see Catão and Solomou (2005).
  - GDP: Braun and others (2000).
  - Population: Maddison (2003).

- Greece
  - Net Foreign Capital Inflow: NA.
  - Foreign Trade and External Terms of Trade: Foreign Trade data from Mitchell (2001). Terms of trade series kindly furnished by Jeffrey Williamson.
  - Specie Reserves: Lazaretou (1993).
  - Central Government Expenditures and Revenues: Mitchell (2001).
  - Central Government Debt: Lazaretou (1993).
  - Money: Lazaretou (1993).
  - Exchange Rate: Catão and Solomou (2005).
  - Domestic Price Index: GDP deflator, as provided in Kostelenos and others (forthcoming).
  - GDP: Kostelenos and others.
  - Population: Maddison (2003).

- Italy
  - Net Foreign Capital Inflow: Calculated as the difference between changes in specie reserves in the banking system and the current account balance reported in Tattara (2001).
  - Foreign Trade and External Terms of Trade: Foreign Trade data from Mitchell (2001). International Historical Statistics: Europe.
  - Specie Reserves: Fratianni Spinelli (1984).
  - Central Government Expenditures and Revenues: Mitchell (2001).
  - Central Government Debt: Zamagni (1998).
  - Money: Fratianni and Spinelli (1984).
  - Exchange Rate: Catão and Solomou (2005).
  - Domestic Price Index: Maddison (1991).
  - GDP: Maddison (1991).
  - Population: Maddison (2003).

- Portugal
  - Net Foreign Capital Inflow: N.A.
  - Foreign Trade and External Terms of Trade: Lains (1995). The figures used are based on the author’s revision of the respective official series.
  - Specie Reserves: Mata and Valério (1994).
  - Central Government Expenditures and Revenues: Mitchell (2001).
  - Central Government Debt: Mata and Valério (1994).
  - Money: Fratianni and Spinelli (1984).
  - Exchange Rate: Catão and Solomou (2005).
  - Domestic Price Index: See Catão and Solomou (2005).
  - GDP: das Neves (1994).
  - Population: ibid.

- Russia
  - Net Foreign Capital Inflow: Calculated as the difference between changes in specie reserves in the banking system and the current account balance reported in Gregory (1982).
  - Foreign Trade and External Terms of Trade: Export and import values from Mitchell (2000). Terms of Trade series kindly provided by Jeffrey Williamson.
  - Specie Reserves: Flandreu and Zulmer (2004).
  - Central Government Expenditures and Revenues: Mitchell (2001).
  - Central Government Debt: Flandreu and Zulmer (2004).
  - Money: Mo from Crisp (1976). M2 adds M0 to bank deposits taken from Mitchell (2001).
  - Exchange Rate: Catão and Solomou (2005).
  - Domestic Price Index: See Catão and Solomou (2005).
  - GDP: In the absence of a GDP series, the net national product estimate provided in Gregory(1982), Table 3.1, pp. 56–7, (“variant 1”) was used.

- Spain
  - Net Foreign Capital Inflow: Unpublished estimates by Leandro Prados, kindly provided by the author.
  - Foreign Trade and External Terms of Trade: Prados (1988).
  - Specie Reserves: Carreras and Tafunell (1988). Aceña and Jaime (2000).
  - Central Government Expenditures and Revenues: Mitchell (2001).
  - Central Government Debt: Carreras and Tafunell (1988).
  - Money: Aceña, op.cit.
  - Exchange Rate: Aceña and Reis (2000).
  - Domestic Price Index: The deflator for private consumption from Prados (2003), Table A. 13.5, pp. 681-82.
  - GDP: Prados (2003), Table A. 13.5, pp. 681-82.
  - Population: ibid.

- Australia
  - Net Foreign Capital Inflow: Calculated as the difference between changes in specie reserves in the banking system and the current account balance underlying Jones and Obstfeld (2001). The database is available at: http://www.nber.org/databases/jones-obstfeld. The Butlin series was chosen for the estimates reported in this paper, since the new current account estimates which completely exclude gold flows yield surprisingly high absolute levels of net capital inflows to GDP in the early 1890s. Both series yield, however, similar inferences on the timing and magnitude of changes in net capital inflows to GDP.
  - Foreign Trade and External Terms of Trade: Trade values from Mitchell (2002). TOT from Bordo and Rockoff (1996).
  - Specie Reserves: Jones and Obtseld (2001).
  - Central Government Expenditures and Revenues: Mitchell (2002).
  - Central Government Debt: Obstfeld and Taylor (2003).
  - Money: Mitchell (2002).
  - Exchange Rate: Obstfeld and Taylor (2003).
  - Domestic Price Index: Obstfeld and Taylor (2003).
  - GDP: Obstfeld and Taylor (2003).
  - Population: Maddison (2003).

- Canada
  - Net Foreign Capital Inflow: Calculated as the difference between changes in specie reserves in the banking system and the current account balance from Urquart and Buckley (1965).
  - Foreign Trade and External Terms of Trade: Trade values from Mitchell, B.M, 2002, International Historical Statistics: Asia and Oceannia, London. TOT from Urquart, M.C. and Buckley, op.cit.
  - Specie Reserves: Jones and Obtsfeld ((2001).
  - Central Government Expenditures and Revenues: Mitchell ((2002).
  - Central Government Debt: Obstfeld and Taylor (2003).
  - Money: Mitchell (2001).
  - Exchange Rate: Obstfeld and Taylor (2003).
  - Domestic Price Index: Obstfeld and Taylor (2003).
  - GDP: Obstfeld and Taylor (2003).
  - Population: Maddison (2003).

- Denmark
  - Net Foreign Capital Inflow: Calculated as the difference between changes in specie reserves in the banking system and the current account balance underlying Jones and Obstfeld (2001). The database is available at: http://www.nber.org/databases/jones-obstfeld.
  - Foreign Trade and External Terms of Trade: Trade values from Mitchell (2002). TOT from Olgaard (1993).
  - Specie Reserves: Jones and Obtsfeld (2001).
  - Central Government Expenditures and Revenues: Mitchell (2002).
  - Central Government Debt: Flandreau and Zulmer (2004).
  - Money: Mitchell (2002).
  - Exchange Rate: Obstfeld and Taylor (2003).
  - Domestic Price Index: Obstfeld and Taylor (2003).
  - GDP: nominal GDP from Obstfeld and Taylor (2003). Real GDP from Maddison (2003).
  - Population: Maddison (2003).

- Finland
  - Net Foreign Capital Inflow: Calculated as the difference between changes in specie reserves in the banking system and the current account balance underlying Jones and Obstfeld (2001). The database is available at: http://www.nber.org/databases/jones-obstfeld.
  - Foreign Trade and External Terms of Trade: Trade values from Mitchell (2001).
  - Specie Reserves: Jones and Obstfeld (2001).
  - Central Government Expenditures and Revenues: Mitchell (2002).
  - Central Government Debt: Flandreau and Zulmer (2004).
  - Money: Mitchell (2002).
  - Exchange Rate: Obstfeld and Taylor (2003).
  - Domestic Price Index: Obstfeld and Taylor (2003).
  - GDP: Hjerppe (1989).
  - Population: Maddison (2003).

- New Zealand
  - Net Foreign Capital Inflow: N.A.
  - Foreign Trade and External Terms of Trade: Mitchell (2002). Terms of Trade kindly provided by Jeffrey Williamson.
  - Specie Reserves: Reserves (coins and bullions) in trading banks from Bloomfield, G.I. 1984, New Zealand: A Handbook of Historical Statistics, G.K. Hall & Co. Boston Mass, Table IX.1, pp.386–87.
  - Central Government Expenditures and Revenues: Mitchell (2002).
  - Central Government Debt: Obstfeld and Taylor (2003).
  - Money: Sum of currency in circulation from Mitchell (2002) and deposits in trading banks Rankin (1992).
  - Exchange Rate: Obstfeld and Taylor (2003).
  - Domestic Price Index: Obsfeld and Taylor (2003).
  - GNP: Rankin (1992).
  - Population: Maddison (2003).

- Norway
  - Net Foreign Capital Inflow: Calculated as the difference between changes in specie reserves in the banking system and the current account balance underlying Jones and Obstfeld (2001). The database is available at: http://www.nber.org/databases/jones-obstfeld.
  - Foreign Trade and External Terms of Trade: Trade values from Mitchell (2002). Terms of trade from Edison and Klovland (1988).
  - Specie Reserves: Jones and Obtsfeld (2001).
  - Central Government Expenditures and Revenues: Mitchell (2002).
  - Central Government Debt: Flandreau and Zulmer (2004).
  - Money: Mitchell (2002).
  - Exchange Rate: Obstfeld and Taylor (2003).
  - Domestic Price Index: Mitchell (2001).
  - GDP: Nominal GDP from Obstfeld and Taylor (2003). Real GDP from Maddison (2003).
  - Population: Maddison (2003).

- Sweden
  - Net Foreign Capital Inflow: Calculated as the difference between changes in specie reserves in the banking system and the current account balance underlying Jones and Obstfeld (2001). The database is available at: http://www.nber.org/databases/jones-obstfeld.
  - Foreign Trade and External Terms of Trade: Trade values from Mitchell (2001?) Terms of Trade and Foreign Trade Prices from Fridlizius (1963).
  - Specie Reserves: Obtsfeld and Jones, op.cit.
  - Central Government Expenditures and Revenues: Mitchell (2001? or 2002).
  - Central Government Debt: Flandreau and Zulmer (2004).
  - Money: Mitchell (2002).
  - Exchange Rate: Obstfeld and Taylor (2003).
  - Domestic Price Index: Maddison (1995).
  - GDP: Nominal GDP from Obstfeld and Taylor, op. cit. Real GDP from Maddison (2003).
  - Population: Maddison (2003).

- United States
  - Net Foreign Capital Inflow: Calculated as the difference between changes in specie reserves in the banking system and the current account balance underlying Jones and Obstfeld (2001).
  - Foreign Trade and External Terms of Trade: Trade values from Mitchell (2001?). Terms of Trade from Williamson (1964).
  - Specie Reserves: Obtsfeld and Jones, op.cit.
  - Central Government Expenditures and Revenues: Mitchell (2001?).
  - Central Government Debt: Obstfeld and Taylor (2003).
  - Money: Mitchell (2001?).
  - Exchange Rate: Officer (2001).
  - Domestic Price Index: Balke and Gordon (1989).
  - GDP: Jones and Obstfeld (2001).
  - Population: Maddison (2003).

- European Core Countries (Bank rates and capital exports)
  - Central Bank Discount Rates: Bank of England’s discount rate from Mitchell (1988). Bank of France’s discount rate from Lévy-Leboyer and Bourguignon (1985). German discount rate from Homer and Sylla (1991).
  - Capital Exports: UK data from Stone (1999); French data from Lévy-Leboyer and Bourguignon (1985); German data from Bloomfield (1968).

*Source: APPENDIX II (content unit _wp06133 - APPENDIX II).*

### REFERENCES

### _wp06133 - REFERENCES

### Monetary standards, gold standard, and international monetary history
- Aceña, Pedro M., and Reis Jaime, 2000, Monetary Standards in the Periphery. Paper, Silver and Gold, 1854–1933 (London and New York: St. Martin’s Press).
- Bordo, Michael, and Roberto Cortés-Conde, eds., 2001, Transferring Wealth and Power from the Old to the New World: Monetary and Fiscal Institutions in the 17th through the 19th century (New York: Cambridge University Press).
- Bordo, Michael, and Hugh Rockoff, 1996, “The Gold Standard as a ‘Good Housekeeping Seal of Approval,’” Journal of Economic History, Vol. 56, No. 2, pp. 384–428.
- Eichengreen, Barry,1992, “The Gold Standard Since Alec Ford,” in Britain in the International Economy 1870–1939, ed. by S.N. Broadberry and N.F.R. Crafts, pp. 47–79 (Cambridge, Massachusetts: National Bureau of Economic Research).
- Meissner, C., 2005, “A New World Order: Explaining the International Diffusion of The Gold Standard, 1870–1913”, Journal of International Economics, Vol. 66, pp.385–406.
- Reis, Jaime, 2000, “The Gold Standard in Portugal 1854–91,” in Monetary Standards in the Periphery. Paper, Silver and Gold, 1854–1933, ed. by Aceña, P.M. and Jaime Reis (London and New York: St. Martin’s Press).
- Whale, Philip B., 1937, “The Working of the Prewar Gold Standard,” Economica 6, pp. 18–32.
- Lindert, Peter H., 1969, “Key Currencies and Gold, 1900-1913”, Princeton Studies in International Finance No. 24 (Princeton: New Jersey).
- Ford, A.G., 1962, The Gold Standard 1880–1914: Britain and Argentina (Oxford: Clarendon Press).

### Exchange rates, currency crises, and external adjustment
- Dornbusch, Rudiger, Ilan Goldfajn, and Rodrigo Valdes, 1995, “Currency Crises and Collapses”, Brookings Papers on Economic Activity: 2, Brookings Institution.
- Calvo, Guillermo, Alejandro Izquierdo, and Luis Fernando Mejía, 2004, “On the Empirics of Sudden Stops: The Relevance of Balance Sheet Effects,” NBER Working Paper No. 10520 (Cambridge, Massachusetts: National Bureau of Economic Research).
- Caballero, Ricardo, Kevin Cowan, and Jonathan Kearns, 2004, “Fear of Sudden Stops: Lessons from Australia and Chile,” NBER Working Paper No. 10519 (Cambridge, Massachusetts: National Bureau of Economic Research).
- Calvo, Guillermo, Leonardo Leiderman, and Carmen Reinhart, 1993, “Capital Inflows and Real Exchange Rate Appreciation in Latin America: The Role of External Factors,” IMF Staff Papers, International Monetary Fund, Vol. 40, No. 1, pp. 108–51.
- Jeanne, Olivier and Andrew Rose, 2002, “Noise Trading and Exchange Rate Regimes,” Quarterly Journal of Economics, Vol. 117, No. 2, pp. 537–69.
- Frankel, Jeffrey, 1979, “On the Mark: A Theory of Floating Exchange Rates Based on Real Interest Differentials,” American Economic Review, Vol. 69, No. 4, pp.610–22.
- Frankel, Jeffrey, and Andrew Rose, 1995, “A Survey of Empirical Research on Nominal Exchange Rates,” in Handbook of International Economics, ed. by Kenneth Rogoff and Gene Grossman (Amsterdam: North-Holland).
- Frankel, Jeffrey, and Andrew Rose, 1996, “Currency Crises in Emerging Markets: An Empirical Treatment,” Journal of International Economics, Vol. 41, pp.351–66.
- Edwards, Sebastian ,1989, Real Exchange Rates, Devaluation and Adjustment: Exchange Rate Policy in Developing Countries (Cambridge, Massachusetts: MIT Press).
- Milesi-Ferretti, Gian Maria, and Assaf Razin, 2000, “Current Account Reversals and Currency Crises: Empirical Regularities,” in Currency Crises, ed. by P. Krugman (Chicago: University of Chicago Press).
- Obstfeld, Maurice, and Kenneth Rogoff, 1996, Foundations of International Macroeconomics (Cambridge, Massachusetts: MIT Press).
- Obstfeld, Maurice, and Taylor, Alan M., 2003, “Sovereign Risk, Credibility and The Gold Standard: 1870–1913 versus 1925–31,” Economic Journal, Vol. 113, No. 487, pp. 241–75.
- Obstfeld, Maurice, and Taylor, Alan M., 2004, Global Capital Markets. Integration, Crisis, and Growth (New York: Cambridge University Press).
- Jeanne, Olivier and Andrew Rose, 2002, “Noise Trading and Exchange Rate Regimes,” Quarterly Journal of Economics, Vol. 117, No. 2, pp. 537–69.
- Krugman, Paul, 1979, “A Model of Balance of Payments Crisis,” Journal of Money, Credit and Banking, Vol. 11, pp. 311–25.
- Kaminsky, Graciela and Carmen Reinhart, 1999, “The Twin Crises: The Cause of Banking and Balance of Payments Problems,” American Economic Review, Vol. 89, No. 3, pp. 473–500.
- Kaminsky, Graciela, Carmen Reinhart, and Carlos Végh, 2004, “When it Rains it Pours: Procylical Capital Flows and Macroeconomic Policies,” NBER Working Paper No. 10780 (Cambridge, Massachusetts: National Bureau of Economic Research).
- Calvo, Guillermo, Alejandro Izquierdo, and Luis Fernando Mejía, 2004, “On the Empirics of Sudden Stops: The Relevance of Balance Sheet Effects,” NBER Working Paper No. 10520 (Cambridge, Massachusetts: National Bureau of Economic Research).

### Capital flows, financial markets, and debt
- Stone, Irving, 1999, The Global Export of Capital from Great Britain, 1865-1914 (New York: St. Martin’s Press).
- Edelstein, Michael, 1982, Overseas Investment in the Age of High Imperialism (New York: Columbia University Press).
- Bloomfield, Arthur, 1968, “Patterns of Fluctuation in International Investment before 1914,” Princeton Studies in International Finance No. 21 (Princeton: New Jersey).
- Bordo, Michael, Christopher Meissner, and Angela Redish, 2003, “How Original Sin was Overcome: The Evolution of External Debt Denominated in Domestic Currency in the United States and British Dominions,” NBER Working Paper No. 9841 (Cambridge, Massachusetts: National Bureau of Economic Research).
- Mauro, Paolo, Nathan Sussman, and Yishay Yafeh, 2002, “Emerging Market Spreads: Then versus Now,” Quarterly Journal of Economics, Vol. 117, No. 2, pp. 695–733.
- Lindert, Peter H., and Peter J. Morton, 1989, “How Sovereign Debt Has Worked,” in Developing Country Debt and Economic Performance, ed. by Jeffrey Sachs, (Chicago: National Bureau of Economic Research).
- Levy, Maria Barbara, 1995, “The Brazilian Public Debt—Domestic and Foreign, 1824–1913,” in The Public Debt in Latin America: a Historical Perspective, ed. by Reinhard Liehr, Frankfurt.
- DeLong, J. Bradford, 1999, “Financial Crises in the 1890s and the 1990s: Must History Repeat?” Brookings Papers on Economic Activity: 2, pp. 253–94, Brookings Institution.

### Country studies, historical statistics, and long-run data
- Balke, Nathan and Robert J. Gordon, 1989, “The Estimation of Prewar Gross National Product: Methodology and New Evidence, Journal of Political Economy, Vol. 97, pp. 38-92.
- Maddison, Angus, 2003, The World Economy: Historical Statistics, OECD, Paris.
- Mitchell, BR., 1988, British Historical Statistics, Cambridge; Bank of France’s discount rate from Lévy-Leboyer, M. and François Bourguignon, 1985, L’Economie Française au XIXe Siécle, Paris; German discount rate from Homer, Sidney and Richard Sylla, 1991, A History of Interest Rates, Rutgers.
- Mitchell, Brian, 2001, “International Historical Statistics,” The Americas, London.
- Mitchell, Brian, 2002, “International Historical Statistics: Asia and Oceania”, London.
- Bloomfield, GI, 1984, “New Zealand: A Handbook of Historical Statistics, G>K. Hall & Co.. (Boston: Massachusetts) Table IX. 1, pp. 386-87.
- Braun, Juan, Matías Braun, Ignacio Briones, José Diaz, Rolf Lunders and Gert Wagner, 2000, “Economía Chilena 1810-1995: Estadísticas Históricas, Documento de Trabajo No. 187, Catholic University of Chile, Instituto de Economía.
- das Neves, João Luís César, 1994, The Portuguese Economy: A Picture in Figures: XIX and XX Centuries with Long Term Series, (Lisbon: Portugal).
- Fratianni, Michele, and Franco Spinelli, 1997, A Monetary History of Italy (New York: Cambridge University Press).
- Kostelenos, G., S. Petmezas, D. Vasileiou, E. Kounaris, M. Sfakianakis, 2006, Gross Domestic Product 1830-1939, Sources of Economic History of Modern Greece, Quantitative Data and Statistical Series 1830-1939, Historical Archives of the National Bank of Greece, Athens, forthcoming.
- Tattara, Giuseppe, and M. Volpe, 1997, “Italy, The Fiscal-Dominance Model, and The Gold-Standard Age,” in Monetary Standards and Exchange Rates, ed. by Marcuzzo, M.C., Officer, L.H. and Rosselli (London: Routledge).
- Fridlizius, Gunnar, 1963, “Sweden’s Exports 1850–1960,” Economy and History II, pp.38–96.
- Hjerppe, Riitta, 1989, “The Finnish Economy, 1860–1985: Growth and Structural Change, Bank of Finland, Helsinki, pp. 259–60.Bank of Finland, Helsinki, pp. 259–60.
- Gregory, Paul R., 1982, Russian National Income, 1885–1913, Cambridge.
- Haddad, C., 1978, O Crescimento do Produto Real Brasileiro, 1900–47, Rio de Janeiro.
- IBGE, 1986, Estatisticas Historicas do Brasil, Rio de Janeiro.
- Goldsmith, Raymond,1986, Desenvolvimento Financeiro sob um Século de Inflação. Rio de Janeiro, Bamerindus and MacGraw Hill.
- Olgaard, 1993, “The Danish Terms of Trade in Foreign Trade, 1875–1963,” in The Economic Development of Denmark and Norway since 1870 ed. by Persson, Karl Gunnar, Hants, England.
- Persson, Karl G., ed., 1993, The Economic Development of Denmark and Norway since 1870 (Aldershot: E. Elgar).
- Llona Rodriguez, Agustín, 1990, “Chilean Monetary Policy: 1860–1925,” PhD dissertation, Boston University.
- Llona Rodriguez, Agustín, 2000, “Chile During the Gold Standard: A Successful Paper Money Experience,” in Monetary Standards in the Periphery: Paper, Silver and Gold, 1854–1933, ed. by Aceña, P.M. and Reis, J. (London and New York: St. Martin’s Press).
- Triner, Gail, 2000, Banking and Economic Development: Brazil, 1889-1930 (New York: Palgrave).
- Braun, Juan, Matías Braun, Ignacio Briones, José Diaz, Rolf Lunders and Gert Wagner, 2000, “Economía Chilena 1810-1995: Estadísticas Históricas, Documento de Trabajo No. 187, Catholic University of Chile, Instituto de Economía.

### Fiscal policy, public finance, and procyclicality
- Bayoumi, Tamim, and Barry Eichengreen, 1995, “Restraining Yourself: The Implications of Fiscal Rules for Economic Stabilization,” Staff Papers, International Monetary Fund, Vol. 42, No.1, pp.32–48.
- Gavin, Michael, and Roberto Perotti, 1997, “Fiscal Policy in Latin America,” NBER Macroeconomics Annual, pp.11–61 (Cambridge, Massachusetts: National Bureau of Economic Research).
- Végh, Carlos, and Ernesto Talvi, 2000, “Tax Base Variability and Procyclical Fiscal Policy,” NBER Working Paper No. 7499 (Cambridge, Massachusetts: National Bureau of Economic Research).
- Catão, Luis A.V., and Sandeep Kapur, 2006, “Volatility and the Debt Intolerance Paradox,” Staff Papers, International Monetary Fund, Forthcoming.
- Tornell, Aaron, and Philip Lane, 1998, “Are Windfalls a Curse?: A Non-Representative Agent Model of the Current Account,” Journal of International Economics, Vol. 44, No. 1, pp. 83–112.
- Kelly, Trish, 1998, “Ability and Willingness to Pay in the Age of the Pax Britannica, 1890–1914,” Explorations in Economic History, Vol. 35, No. 1, pp. 31–58.
- Fishlow, Albert, 1989, “Conditionality and Willingness to Pay: Some Parallels from the 1890s,” in The International Debt Crisis in Historical Perspective, ed. by Barry Eichengreen and Peter H. Lindert (Cambridge, Massachusetts: MIT Press).

### Methodology, theory, and macro-financial models
- Balke, Nathan and Robert J. Gordon, 1989, “The Estimation of Prewar Gross National Product: Methodology and New Evidence, Journal of Political Economy, Vol. 97, pp. 38-92.
- Kiyotaki, N., and J. Moore, 1997, "Credit Cycles," Journal of Political Economy, Vol. 105, No. 2, pp. 211–48.
- Frankel, Jeffrey, and Andrew Rose, 1995, “A Survey of Empirical Research on Nominal Exchange Rates,” in Handbook of International Economics, ed. by Kenneth Rogoff and Gene Grossman (Amsterdam: North-Holland).
- Obstfeld, Maurice, and Kenneth Rogoff, 1996, Foundations of International Macroeconomics (Cambridge, Massachusetts: MIT Press).
- Jones, Matthew T. and Maurice Obstfeld, 2001,“Saving, investment, and Gold: A Reassessment of Historical Current Account Data,” in Money, Capital Mobility and Trade: Essays in Honor of Robert A. Mundell, ed. by Guillermo A. Calvo, Maurice Obstfeld and Rudiger Dornbusch, MIT Press.
- Dornbusch, Rudiger, Ilan Goldfajn, and Rodrigo Valdes, 1995, “Currency Crises and Collapses”, Brookings Papers on Economic Activity: 2, Brookings Institution.
- Krugman, Paul, 1979, “A Model of Balance of Payments Crisis,” Journal of Money, Credit and Banking, Vol. 11, pp. 311–25.
- Kiyotaki, N., and J. Moore, 1997, "Credit Cycles," Journal of Political Economy, Vol. 105, No. 2, pp. 211–48.
- Tornell, Aaron, and Philip Lane, 1998, “Are Windfalls a Curse?: A Non-Representative Agent Model of the Current Account,” Journal of International Economics, Vol. 44, No. 1, pp. 83–112.
- Eichengreen, Barry, and Ricardo Haussman, 1999, "Exchange Rate Regimes and Financial Fragility," NBER Working Paper No. 7418 (Cambridge, Massachusetts: National Bureau of Economic Research).
- Eichengreen, Barry, and Ricardo Haussman, 2003, Capital Flows and Crises (Cambridge, Massachusetts: MIT Press).
- Kiyotaki, N., and J. Moore, 1997, "Credit Cycles," Journal of Political Economy, Vol. 105, No. 2, pp. 211–48.

*Source: _wp06133 - REFERENCES*

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