This study of recent instability in seven Asian countries-Hong Kong, Indonesia, the Republic of Korea, Malaysia, the Philippines, Singapore, and Thailand-finds that capital mobility increased in six of the countries. Capital market risk increased the most in Thailand. And except in Singapore,...

Macroeconomic variables matter and so does liquidity. External shocks (international interest rates) appear not to matter.In the 1990s international bond issues from developing countries surged dramatically, becoming one of the fastest-growing devices for financing external development. Their...

Raising interest rates and devaluing currencies - traditional measures to stem capital flight and stabilize capital inflows during a financial crisis - were unable to change institutional investors' (self-fulfilling) expectations and herding behavior in four countries studied (Indonesia, the...

Even though real exchange rate has an important impact on sustainable export and economic growth for small open economies, its impact on income distribution and transmission mechanism was never investigated. The paper shows that improved income distribution, through its impact on the price of...

The authors investigate how the thinness of foreign-exchange markets causes destabilization speculation, especially when exchange-rate flexibility is increased, as it has been in the countries involved in the Asian crisis. They analyze the impact of this market thinness on the dynamic capital...