Most of the emerging market currency crises are accompanied by sharp reversals or quot;sudden stopsquot; of capital inflows. We investigated whether some types of capital flows are more likely to reverse than others during these crises. Foreign direct investment is usually considered stable...

Large global economic and financial imbalances have already contributed to the global financial crisis and the euro zone crisis. A substantial retreat into protectionism may be generated. Huge current account surpluses and deficits have caused economic and financial dislocations in both emerging...

There has been much interest in whether fixed exchange rates can provide a strong source of discipline over domestic monetary and fiscal policies. We argue that previous studies, however, have not paid sufficient attention to the distinction between constraint and incentive effects and that...