"In contrast with a growing literature on the drivers of aggregate volatility in developing countries, its consequences … aggregate volatility has a regressive, asymmetric, and non linear impact, as reflected in the strong influence of extreme output …

The overall impact of financial globalization on the domestic financial sector is profound. Liberalization of capital …. Following liberalization, domestic interest rates in developing countries have moved to a premium over industrial country rates …, and can surge at times of currency speculation. Heightened interest rate and exchange rate volatility pose practical risk …