The Asian financial crisis of 1997 evolved through many stages. Although there is a consensus among economists on its "ingredients", a disagreement still exists about the exact mechanisms. This paper proposes a model explaining the triggering event of the crisis as represented by the abandon of...

Given the rising importance of non-financial corporate overseas debt issuance in the overall international capital flow activities, this paper tries to understand the determinants of corporate overseas bond issuance in 32 countries during the sample period 1993-2015. The results suggest that the...

China was extremely successful in recent decades in managing external equilibrium in the short and medium term using three mechanisms to cushion the balance of payments shocks. First, it maintained a flexible rate, so could adjust to the fluctuations in trade balance and capital flows via...

The Democratic Republic of Congo (DRC) has faced persistent current account deficits despite a period of economic growth fueled by Foreign Direct Investment (FDI). This paper uses an Autoregressive Distributed Lag (ARDL) model and the Balance of Payments (BOP) framework to explore the dynamics...

There are cases where the parallel (or secondary) exchange rate applies only to a few limited transactions. An example is the “switch pound” in the United Kingdom during September 1950 through April 1967. However, it is not unusual for dual or parallel markets (legal or otherwise) to account...

Comments on: Alan Drazen, whose paper represents a first effort to formalize the role of political considerations in the process of how currency crises are transmitted across international borders. The theoretical literature on “contagion” is scarce, and the empirical literature equally so....

Over the past two hundred years -- some would argue even longer -- financial events, such as the devaluation of a currency or an announcement of default, have been capable of triggering an immediate adverse chain reaction among countries within a region and in some cases across regions. The...

During the early 1990s much has been written about the return of foreign private capital to many of the larger Asian and Latin American countries. However, until 1992 there was little evidence that countries in sub-Saharan Africa were participating in this phenomenon. In this paper we use...

Capital inflows are not an unmitigated blessing for the receiving region or country; in fact, they may pose serious dilemmas for economic policy. Large capital inflows are often associated with money and credit expansion, inflationary pressures, a real exchange rate appreciation, and a...

Este trabajo presenta un análisis teórico y empirico de las politicas dirigidas a alcanzar un nivel más depreciado de la tasa de carnbio real. Un modelo de optimización intertemporal sugiere que, en ausencia de cambios en la politica fiscal, un nivel más depreciado de la tasa de carnbio...