We examine the short- and long-run effects of financial liberalization on capital markets. To do so, we construct a new comprehensive chronology of financial liberalization in 28 mature and emerging market economies since 1973. We also construct an algorithm to identify booms and busts in stock...

We characterise the probability distributions of various categories of gross capital flows conditional on information contained in financial asset prices in a panel of emerging market economies, with a focus on "tail" events. Our framework, based on the quantile regression methodology, allows...

Currency market intervention-cum-reserve accumulation has emerged as the favored "selfinsurance" strategy in recipient countries of excessive private capital inflows. This paper argues that capital account management represents a less costly alternative line of defense deserving renewed...

This paper gives an overview on the use of macroprudential policy measures (MPMs) and capital flow management measures (CFMs) by emerging economies, and reviews literature on the effectiveness of these measures in containing the effects of large and volatile capital flows. The main findings of...

This paper presents an analytical overview of recent contributions to the literature on the policy implications of capital flows in emerging and developing countries, focusing specifically on capital inflows as well as on the links between inflows and subsequent capital-flow reversals. The...

Iceland is a member of the IMF and of the WTO, a party to the European Economic Area Agreement, and a signatory of the OECD Code of Liberalisation of Capital Movements. Iceland is bound by Art. VIII IMF not to impose restrictions on current payments. Furthermore, under the GATS, Iceland cannot...

Emerging countries in many cases are more crisis-prone than highly developed industrialized countries. This is in many cases due to a weak or volatile financial sector. The best policy to strengthen crisis resistance is the building up of a sound financial position. A sound financial position of...

The COVID-19 pandemic has challenged global economies with unparalleled negative shock. Asia and Latin America have gone through a number of financial crises in the last few decades but they have addressed those crises rather differently, leading to different growth trajectories after the...

Most models currently used to determine optimal foreign reserve holdings take the level of international debt as given. However, given the sovereign's willingness-to-pay incentive problems, reserve accumulation may reduce sustainable debt levels. In addition, assuming constant debt levels does...

Emerging countries in many cases are more crisis-prone than highly developed industrialized countries. This is in many cases due to a weak or volatile financial sector. The best policy to strengthen crisis resistance is the building up of a sound financial position. A sound financial position of...