Balance of payment crises, characterized by Sudden Stops, are not a phenomenon exclusive to emerging economies. This paper identifies 16 and 50 crises in advanced and emerging economies, respectively. Further, decomposing the Financial Account uncovers important differences between both groups...

Why are balance of payments crises, characterized by Sudden Stops of capital inflows, more frequent in emerging economies than advanced economies? This paper argues that differences in the composition of the financial account flows explain 30 percent of the gap in the probability of a crisis....

The performance of macroeconomic indicators of capital mobility is examined in the context of an intertemporal equilibrium model of a small open economy. Recursive numerical solution methods are used to compute measures of consumption smoothing, savings-investment correlation, and the...