Capital Flows and Financial Crises: A Comparative Analysis of East Asia (1997-98) and Argentina (2001-02)
Complutense University of Madrid
Complutense University of Madrid Economics Working Paper No. 2004-017
This paper suggests, first, that a simple theoretical framework is useful in explaining financial crises in emerging economies. Second, it reviews the East Asian financial crises of 1997-98. Third, the paper examines the origins of Argentina's crisis of 2001-02. Fourth, it presents a comparative analysis of both crises, highlighting their similarities and differences. Finally, the conclusions point out the drawbacks of both hard and soft pegs respective to a single foreign currency as well as the need for emerging economies to use capital controls in order to avoid the recurrence of financial crises.
Number of Pages in PDF File: 29
Keywords: East Asia, Argentina, financial crisis, emerging economies, exchange rate, financial markets
JEL Classification: F31, F32, F34, F43working papers series
Date posted: November 3, 2004
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