While a number of crises originated in emerging markets were characterized by widespread contagion in financial markets during the 1990s, more recent crises (notably, in Argentina) have been mostly contained within national borders. This has led some observers to wonder whether contagion might...

Do controls on capital flows persistently isolate domestic markets from international markets? Or is the insulation they provide just ephemeral?Kaminsky and Schmukler study whether capital controls affect the link between domestic and foreign stock market prices and interest rates. To examine...

This paper studies whether capital controls affect the link between domestic and foreign stock market prices and interest rates. To examine the characteristics of international market integration and the effects of capital controls in the short- and long-run, we use band-pass filter techniques....

The rise and fall of Argentina´s currency board illustrates the extent to which the advantages of hard pegs have been overstated. The currency board did provide nominal stability and boosted financial intermediation, at the cost of endogenous financial dollarization, but did not foster fiscal...

This paper offers a possible theoretical rationale - currently lacking - for the proposition that intermediate exchange rate regimes are no longer viable. According to this proposition, countries are being pushed to the ldquo;corners,rdquo; the extremes of either free floating or firm fixing. We...

This paper argues that short termism, dollarization, and the use of foreign jurisdictions are endogenous ways of coping with systemic risks prevalent in emerging markets. They represent a symptom at least as much as a problem. These coping mechanisms are jointly determined and the choice of one...

Three main features characterize the international financial integration of China and India. First, while only having a small global share of privately-held external assets and liabilities (with the exception of China's FDI liabilities), these countries are large holders of official reserves....

The rise and fall of Argentina's currency board illustrates the extent to which the advantages of hard pegs have been overstated. The currency board did provide nominal stability and boosted financial intermediation, at the cost of endogenous financial dollarization, but did not foster fiscal or...

Kaminsky and Schmukler examine the short- and long-run effects of financial liberalization on capital markets. To do so, they construct a new comprehensive chronology of financial liberalization in 28 developed and emerging economies since 1973. The authors also construct an algorithm to...

Hikes in U.S. interest rates in 1999-2000 have started to spill over to other economies' interest rates, which in many countries have risen to reflect the higher U.S. rates. Are countries with flexible exchange rates better able to isolate their domestic interest rates from this type of negative...