The Persistence of Capital Account Crises

28 Pages Posted: 1 Jun 2009

See all articles by Mauro Mecagni

Mauro Mecagni

International Monetary Fund (IMF)

Ruben Atoyan

International Monetary Fund (IMF)

David Hofman

International Monetary Fund (IMF)

Date Written: May 2009

Abstract

This study contributes to the literature on capital account crises in two ways. First, our analysis of crisis episodes between 1994 and 2002 establishes a clear relationship between the persistence of crises, their complexity, and the intensity of movement of key macroeconomic variables. Second, we provide a systematic examination of the determinants of crisis duration. Our econometric analysis suggests that initial conditions and the external environment plays a key role in determining crisis persistence. The policy response also matters, but cannot offset a record of poor past policies. Overall, the results underscore the critical importance of crisis prevention efforts.

Keywords: Capital account, Capital controls, Capital markets, Capital outflows, Data analysis, Economic models, Exchange rate regimes, External sector, Financial crisis, Fiscal policy, Monetary policy

Suggested Citation

Mecagni, Mauro and Atoyan, Ruben and Hofman, David, The Persistence of Capital Account Crises (May 2009). IMF Working Papers, Vol. , pp. 1-28, 2009. Available at SSRN: https://ssrn.com/abstract=1408886

Mauro Mecagni

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

Ruben Atoyan

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

David Hofman (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

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