Globalization and catching up -- The key institution -- New developmentalism -- The tendency of the exchange rate toward overvaluation -- The Dutch disease -- Foreign savings and slow growth -- Foreign savings and financial crises

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...