The financial press has often characterized the 2007-2008 United States subprime mess as a new breed of crisis. Indeed, this view often points to the international repercussions of the U.S.-based crisis as evidence that the globalization of financial portfolios has introduced new channels for...

During the past few years, many emerging market countries have suffered severe currency and banking crises. A popular view blames fixed exchange rates--specifically, soft pegs--for these financial meltdowns. Indeed, fixed exchange rates have been so demonized by some adherents to that view that...

The literature on capital controls has (at least) four very serious apples-to-oranges problems: (i) There is not unified theoretical framework to analyze the macroeconomic consequences of controls; (ii) there is significant heterogeneity across countries and time in the control measures...

Over the past two hundred years -- some would argue even longer -- financial events, such as the devaluation of a currency or an announcement of default, have been capable of triggering an immediate adverse chain reaction among countries within a region and in some cases across regions. The...

A model that merges the monetary approach to the balance of payments and a neoclassical growth model into a unified framework in which inflation, growth, and the balance of payments are simultaneously determined and estimated. The tradeoff between the simplifying assumtions of the model and its...

This papers examines the empirical literature on currency crises and proposes a specific early warning system. This system involves monitoring the evolution of several indicators that tend to exhibit unusual behaviorin the periods preceding a crisis. When an indicator exceeds a certain threshold...

More frequent and increasingly severe crises are encouraging emerging market economies to seek means to make themselves less vulnerable to sudden stops in capital flows. Capital controls have been widely discussed, but dollarization may offer a longer-term and more market-friendly solution.

the simplicity that makes a model more tractable from an operational standpoint may have several drawbacks as a result of the necessarily restrictive assumptions it employs. This paper assesses the empirically the trade-off between its simplifying assumptions and its ability to fit reality. This...

The characteriscs of recent capital inflows to Latin America are discussed. It is argued that these inflows are partially explained by economic conditions outside the region, like the recession in the United States and lower international interest rstes. The importance of external factors...

These are the narrative individual country histories of exchange rate arrangements, 1946-2001 that underpin "The Modern History of Exchange Rate Arrangements: A Reinterpretation". The chronologies allow us to date dual or multiple exchange rate episodes, as well as to differentiate between...