This paper presents empirical evidence that bank lending, and capital inflows can explain the severity of the Asian crisis of 1997 above and beyond macroeconomic fundamentals. We find that countries that share Japanese banks as their major lender with Thailand, the first victim in the Asian...

Similar to Chile in the 1990s, Slovenia has introduced an unremunerated reserve requirement (URR) on financial credits in 1995. We find that the URR has not been effective in reducing overall inflows of foreign capital. Hence, the gain in monetary autonomy has been limited. While the overall...

This paper draws a link between international capital flows and the real options approach to investment by extending the development and cascade model applied by Grenadier (Journal of Finance 51, 1996) to real estate markets. This modified model rationalizes such phenomena as gradual investment,...

The ongoing financial globalization has instigated growing concerns on the issue of benefits and costs from free international capital mobility. Past experiences in the emerging market countries indicate that foreign capital inflows could cause persistent current account deficits and lead to...

The objective of this paper is to in-depth study the financial liberalization process in the various segments of the emerging-market economies and observe whether the resulting assertion of fast-clip real GDP growth holds. The author examines financial and macroeconomic turbulence in the...

This paper revisits the debate on the financial stability implications of the liberalization process dynamics. We hold that the financial liberalization effect on exchange pressures changes beyond some threshold degrees. Therefore, we assess the ability of the threshold models to gauge financial...

This paper investigates the large current account deficits observed in most new EU member states using an intertemporal model. The standard model is extended to include: (1) the persistence of current account positions and (2) the relevance of the fiscal balance. Specifically, a closed form...

This paper uses a simple open economy interest rate determination model to empirically examine an important aspect of pre-crisis monetary and exchange rate policy. It investigates whether sterilization of the reserve effects of capital inflows helped keep interest rates sufficiently high that...

We investigate the relationship between terms-of-trade shocks and the current account of a small open economy in the presence of imperfect competition and nominal price rigidities in the nontraded sector. We show that a temporary termsof- trade improvement results in a current account surplus...

In this paper we attempt to examine the issue of sustainability of current account imbalances in eight East Asia countries using the latest developments in nonstationary panel data analysis. The methods of nonstationary time series panels provide a much more promising explanation than would an...