We evaluate whether financial openness leaves emerging market economies vulnerable to the adverse effects of capital reversals ("sudden stops") on domestic investment. We investigate this claim in a broad sample of emerging markets during the period 1976-2002. If the banking sector does not...

This paper investigates the impact of changes in monetary variables on the domestic and foreign sectors, the determinants of central bank policy, and the response to foreign monetary changes in Mexico and India. Multivariate Granger-causality tests, variance decompositions and impulse response...