{
  "title": "External Finance, Sudden Stops, and Financial Crisis: What is Different This Time?",
  "publication": "IMF Working Papers, July 1, 2010",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/31/external-finance-sudden-stops-and-financial-crisis-what-is-different-this-time-24034",
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  "summary": "This paper develops a two-country DSGE model to investigate the transmission of a global financial crisis to a small open economy.",
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    {
      "heading": "Research objective and model",
      "content": "- Develops a two-country DSGE model to investigate the transmission of a global financial crisis to a small open economy.\n- Focus areas (subjects and keywords as provided): Consumption, Currencies, Financial crises, Labor, Money, National accounts, Return on investment, Self-employment; capital demand, capital goods, Consumption, Currencies, domestic economy, DSGE model, economy variable, Emerging Markets, equilibrium mark-up, Financial Crises, financial crisis, Global, net export, nominal price, optimal contract, price adjustment cost, price level, production firm, Return on investment, risk premium, Self-employment, Sudden Stops, WP."
    },
    {
      "heading": "Key findings and results",
      "content": "- Economies hit by a sudden stop arising from financial distress in the global economy are likely to face a more prolonged crisis than sudden stop episodes of domestic origin.\n- In contrast to the existing literature, the paper's results suggest that the greater a country's trade integration with the rest of the world, the greater the response of its macroeconomic aggregates to a sudden stop of capital flows."
    },
    {
      "heading": "Implications and interpretation",
      "content": "- Global-origin sudden stops can produce more prolonged adverse dynamics in small open economies than domestically originated sudden stops.\n- Trade integration magnifies the macroeconomic response to interruptions in capital flows, implying that openness to trade can increase vulnerability to global financial distress."
    },
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      "heading": "Access and format notes",
      "content": "- Publication type: IMF Working Papers\n- Available formats and services mentioned: Download PDF; More Formats on IMF eLibrary; Order a Print Copy; Create Citation.\n- Preview citation example (format: Chicago) as provided: Gülçin Özkan, and Filiz D Unsal. \"External Finance, Sudden Stops, and Financial Crisis: What is Different This Time?\", IMF Working Papers 2010, 158 (2010), accessed 9/17/2026, https://doi.org/10.5089/9781455201419.001\n\nThis summary is based on the IMF working paper \"External Finance, Sudden Stops, and Financial Crisis: What is Different This Time?\" by Gülçin Özkan and Filiz D Unsal (Working Paper No. 2010/158).\n\n---\n\n Content in this bundle\n\n- Wp10158\n  - Wp10158 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Wp10158 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/31/external-finance-sudden-stops-and-financial-crisis-what-is-different-this-time-24034"
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    "Authors: Gülçin Özkan, Filiz D Unsal",
    "Published: July 1, 2010",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781455201419.001",
    "Develops a two-country DSGE model to investigate the transmission of a global financial crisis to a small open economy.",
    "Focus areas (subjects and keywords as provided): Consumption, Currencies, Financial crises, Labor, Money, National accounts, Return on investment, Self-employment; capital demand, capital goods, Consumption, Currencies, domestic economy, DSGE model, economy variable, Emerging Markets, equilibrium mark-up, Financial Crises, financial crisis, Global, net export, nominal price, optimal contract, price adjustment cost, price level, production firm, Return on investment, risk premium, Self-employment, Sudden Stops, WP.",
    "Economies hit by a sudden stop arising from financial distress in the global economy are likely to face a more prolonged crisis than sudden stop episodes of domestic origin.",
    "In contrast to the existing literature, the paper's results suggest that the greater a country's trade integration with the rest of the world, the greater the response of its macroeconomic aggregates to a sudden stop of capital flows.",
    "Global-origin sudden stops can produce more prolonged adverse dynamics in small open economies than domestically originated sudden stops.",
    "Trade integration magnifies the macroeconomic response to interruptions in capital flows, implying that openness to trade can increase vulnerability to global financial distress.",
    "Publication type: IMF Working Papers",
    "Available formats and services mentioned: Download PDF; More Formats on IMF eLibrary; Order a Print Copy; Create Citation.",
    "Preview citation example (format: Chicago) as provided: Gülçin Özkan, and Filiz D Unsal. \"External Finance, Sudden Stops, and Financial Crisis: What is Different This Time?\", IMF Working Papers 2010, 158 (2010), accessed 9/17/2026, https://doi.org/10.5089/9781455201419.001",
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