Short-Term Capital Flows
Dani Rodrik, Andres Velasco
We provide a conceptual and empirical framework for evaluating the effects of short-term capital flows. A simple model of the joint determination of the maturity and cost of external borrowing highlights the role played by self-fulfilling crises. The model also specifies the circumstances under which short-term debt accumulation is socially excessive. The empirical analysis shows that the short-term debt to reserves ratio is a robust predictor of financial crises, and that greater short-term exposure is associated with more severe crises when capital flows reverse. Higher levels of M2/GDP and per-capita income are associated with shorter-term maturities of external debt. The level of international trade does not seem to have any relationship with levels of short-term indebtedness, which suggests that trade credit plays an insignificant role in driving short-term capital flows. Our policy analysis focuses on ways in which potential illiquidity can be avoided
Year of publication: |
September 1999
|
---|---|
Authors: | Rodrik, Dani |
Other Persons: | Velasco, Andres (contributor) |
Institutions: | National Bureau of Economic Research (contributor) |
Publisher: |
Cambridge, Mass : National Bureau of Economic Research |
Subject: | Kapitalmobilität | Capital mobility | Schwellenländer | Emerging economies | Internationale Staatsschulden | International sovereign debt | Finanzkrise | Financial crisis | Fälligkeit | Maturity | Welt | World | Zinsstruktur | Yield curve | Theorie | Theory |
Saved in:
freely available
Extent: | 1 Online-Ressource |
---|---|
Series: | NBER working paper series ; no. w7364 |
Type of publication: | Book / Working Paper |
Language: | English |
Notes: | Mode of access: World Wide Web System requirements: Adobe [Acrobat] Reader required for PDF files Hardcopy version available to institutional subscribers. |
Other identifiers: | 10.3386/w7364 [DOI] |
Source: | ECONIS - Online Catalogue of the ZBW |
Persistent link: https://www.econbiz.de/10012471420