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Financial stability is an important policy objective, since crises are associated with large economic, social and political costs. Promoting stability requires preventing 'sudden stops' in capital flows, which are events in which foreign financing abruptly disappears. This paper contributes to...

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Trade, gravity, and sudden stops: On how commercial trade can increase the stability of capital flows

Cavallo, Eduardo A.; Cavallo, Eduardo A. - 2005

Financial stability is an important policy objective since crises are associated with big economic, social, and political costs. Promoting stability requires preventing 'sudden stops' in capital flows, which are events in which foreign financing abruptly disappears. This paper contributes to the...

Persistent link: https://www.econbiz.de/10010397715