Intro -- Contents -- I. INTRODUCTION -- II. PATTERNS OF SUDDEN STOPS -- III. CAPITAL FLOWS AND CURRENCY CRASHES -- IV. DOMESTIC FINANCIAL IMPERFECTIONS AND PROCYCLICAL BEHAVIOR -- V. CONCLUSION -- REFERENCES.

This paper presents a simple model of optimal reserves that can be easily calibrated to compute optimal reserves as well as the implied probability of a sudden stop for given reserves. The model builds upon the global games framework of Morris and Shin to establish a unique relationship between...

Intro -- Contents -- I. INTRODUCTION -- II. SUDDEN STOPS AND MULTILATERAL INSURANCE -- III. CAPITAL FLOWS AND SUDDEN STOPS -- IV. IMF-SUPPORTED PROGRAMS -- V. MULTIVARIATE ANALYSIS -- VI. IMF-SUPPORTED PROGRAMS AND SUDDEN STOPS -- VII. EXTENSIONS -- VIII. CONCLUSIONS AND IMPLICATIONS -- Appendix...

This study contributes to the literature on capital account crises in two ways. First, our analysis of crisis episodes between 1994 and 2002 establishes a clear relationship between the persistence of crises, their complexity, and the intensity of movement of key macroeconomic variables. Second,...