The financial crisis has re-ignited the fierce debate about the merits of financial globalization and its implications for growth, especially for developing countries. The empirical literature has not been able to conclusively establish the presumed growth benefits of financial integration....

Conventional empirical models of monetary policy transmission in emerging market economies produce puzzling results: monetary tightening often leads to an increase in prices (the price puzzle) and depreciation of the currency (the FX puzzle). We show that incorporating forward-looking...

Frontmatter -- Contents -- List of Figures and Tables -- Preface to the Paperback Edition -- Preface -- Part One. Setting the Stage -- Part Two. Building Blocks -- Part Three. Inadequate Institutions -- Part Four. Currency Competition -- Appendix -- Notes -- References -- Acknowledgments -- Index

"I document that emerging markets have cast off their "original sin"--their external liabilities are no longer dominated by foreign-currency debt and have instead shifted sharply towards direct investment and portfolio equity. Their external assets are increasingly concentrated in foreign...