This article investigates the effects of macroeconomic policy (monetary and fiscal) on output growth during financial crises characterized by a sudden stopʺ in net capital inflows in developing and emerging market economies. We investigate 83 sudden stop crises in 77 countries over 1982-2003...

We develop an alternative test of the 'German view' that fiscal contractions may lead to immediate consumption booms derived from a form of a open-economy permanent income model where we add uncertainty over whether shocks are permanent or transitory. Using a time-series statistical methodology,...