In this paper we examine closely the financial events following the Mexican peso
devaluation to uncover new lessons about the nature of financial crises. We explore the …

A pattern has often been repeated in the modern era of global finance. Foreign investors
turn with interest toward some developing country. Capital flows in volume into small and …

Mexico's economic crisis in December 1994 gave renewed importance to the issue of
spillover or contagion effects in other emerging market economies (and their sensitivity to …

THE CURRENCY CRISES that broke out in East Asia in mid-1997 have been followed by
more than a year of tumult in international financial markets. These crises have had a …

This paper studies the determinants and sustainability of the widespread private capital
inflows to middle-income countries after 1989. The key question is whether these flows are …

Emerging markets have long posed a challenge for finance. Standard models are often ill
suited to deal with the specific circumstances arising in these markets. However, the interest …

I study whether and how US shocks are transmitted to eight Latin American countries. US
shocks are identified using sign restrictions and treated as exogenous with respect to Latin …

THE EAST ASIAN crisis is only the latest in a series of spectacular economic catastrophes in
developing countries. In the past twenty years at least ten countries have suffered from the …

This paper empirically evaluates four types of costs that may result from an international
sovereign default: reputational costs, international trade exclusion costs, costs to the …

We study the optimal accumulation of international reserves in a quantitative model of
sovereign default with long-term debt and a risk-free asset. Keeping higher levels of …