Financial Openness, Sudden Stops, and Current-Account Reversals

Sebastian Edwards
2004 The American Economic Review  
In this paper I use a panel data set to investigate the mechanics of sudden stops of capital inflows and current account reversals. I am particularly interested in four questions: (a) What is the relationship between sudden stops and current account reversals? (b) To what extent does financial openness affect the probability of a country being subject to a current account reversal? In other words, do restrictions on capital mobility reduce the probability of such occurrences? (C) Does
doi:10.1257/0002828041302217 fatcat:i5gboqqegzbddjfzmj5pk3rykq