Sudden stop, financial factors, and economic collpase in Latin America
Subtitle: learning from Argentina and Chile
By: Guillermo A. Calvo, Ernesto Talvi.
Contributors: Talvi, Ernesto.; National Bureau of Economic Research.
Series: NBER working paper series ;; working paper 11153; Working paper series (National Bureau of Economic Research : Online) ;; working paper no. 11153.
Publisher: National Bureau of Economic Research
Published: 2005
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Subjects: Capital movements -- Argentina.; Capital movements -- Chile.; Financial crises -- Argentina.; Financial crises -- Chile.; Argentina -- Economic conditions -- 1983-; Chile -- Economic conditions -- 1988-
Description: "This paper shows that the Russian 1998 crisis had a big impact on capital flows to emerging market economies, EMs, especially in Latin America, and that the impact of the Russian shock differs quite markedly across EMs.  To illustrate this statement, we compare the polar cases of Chile and Argentina.  While Chile exhibited a significant economic slowdown after August 1998, it did not suffer the excruciating collapse suffered by Argentina, where even the payments system came to a full stop.  We attribute their difference to the fact that Chile is more open to trade than Argentina, and that it appears to suffer much less from balance-sheet currency-denomination mismatch that was rampant in Argentina before the 2002 crisis (due to large domestic liability dollarization).  The paper is essentially descriptive but is in line with and, thus, complements econometric studies like Calvo, Izquierdo and Mejia (NBER Working Paper 10520).  The final section addresses policy issues in light of the paper's findings and conjectures"--National Bureau of Economic Research web site.
Notes: Includes bibliographical references.
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