I measure the welfare gains from eliminating fluctuations in investment in an emerging economy such as Argentina. The estimated welfare effects are an order of magnitude higher than those for the US and arise with moderate degrees of diminishing returns to investment

A substantial amount of foreign portfolio and bank-related capital has been flowing into a number of emerging market economies since 2009. A reversal of these flows as a consequence of financial deleveraging or waning risk appetite could place the financial sectors of many of those economies...

Three factors have characterized FX returns in the recent round of currency moves, all of which can be thought of as measures of risk: the size of short-term liabilities relative to reserves, the deterioration of the current account in 2005-2007, and the closeness of the relationship with...