This file is part of IDEAS, which uses RePEc data


[ Papers | Articles | Software | Books | Chapters | Authors | Institutions | JEL Classification | NEP reports | Search | New papers by email | Author registration | Rankings | Volunteers | FAQ | Blog | Help! ]

Balance of Payments Crises and Capital Flows: The Role of Liquidity

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
Ilan Goldfajn
Rodrigo Valdés
Abstract

A model of external crises is developed focusing on the interaction between liquidity creation by financial intermediaries and foreign exchange collapses. The intermediaries' role of transforming maturities is shown to result in larger movements of capital and a higher probability of crises. This resembles the observed cycle in capital flows: large inflows, crises and abrupt outflows. The model highlights how adverse productivity and international interest rate shocks can be magnified by the behavior of individual foreign investors linked together through their deposits in the intermediaries. An eventual collapse of the exchange rate can link investors' behavior even further.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.bcentral.cl/estudios/documentos-trabajo/pdf/DTBC11A.PDF
Our checks indicate that this address may not be valid because: 404 Not Found. If this is indeed the case, please notify (Claudio Sepulveda)
File Format:
File Function:
Download Restriction: no
File URL: http://www.bcentral.cl/estudios/documentos-trabajo/pdf/DTBC11B.PDF
Our checks indicate that this address may not be valid because: 404 Not Found. If this is indeed the case, please notify (Claudio Sepulveda)
File Format:
File Function:
Download Restriction: no
File URL: http://www.bcentral.cl/estudios/documentos-trabajo/pdf/DTBC11C.PDF
Our checks indicate that this address may not be valid because: 404 Not Found. If this is indeed the case, please notify (Claudio Sepulveda)
File Format: application/pdf
File Function:
Download Restriction: no

Publisher Info
Paper provided by Central Bank of Chile in its series Working Papers Central Bank of Chile with number 11.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length:
Date of creation: Mar 1997
Date of revision:
Handle: RePEc:chb:bcchwp:11

Contact details of provider:
Postal: Casilla No967, Santiago
Phone: (562) 670 2000
Fax: (562) 698 4847
Web page: http://www.bcentral.cl/
More information through EDIRC

For technical questions regarding this item, or to correct its listing, contact: (Claudio Sepulveda).

Related research
Keywords:

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Michael P. Dooley, 1997. "Apertura financiera y retos de políticas," RES Working Papers 4103, Inter-American Development Bank, Research Department. [Downloadable!]
  2. Pierre-Richard Agenor & Joshua Aizenman, 1997. "Contagion and Volatility with Imperfect Credit Markets," NBER Working Papers 6080, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  3. Miguel A. Kiguel & Alain Ize & Eduardo Levy Yeyati, 2005. "Managing Systemic Liquidity Risk in Financially Dollarized Economies," IMF Working Papers 05/188, International Monetary Fund. [Downloadable!]
  4. Alain Ize & Miguel Kiguel & Eduardo Levy Yeyati, 2005. "Managing Systemic Liquidity Risk in Financially Dollarized Economy," Business School Working Papers managsystrisk, Universidad Torcuato Di Tella. [Downloadable!]
  5. Michael P. Dooley & Inseok Shin, 2000. "Private Inflows when Crises are Anticipated: A Case Study of Korea," NBER Working Papers 7992, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  6. Michael P. Dooley, 1997. "Financial Liberalization and Policy Challenges," RES Working Papers 4102, Inter-American Development Bank, Research Department. [Downloadable!]
  7. Shankar, Rashmi, 2002. "Distinguishing between observationally equivalent theories of crises," Policy Research Working Paper Series 2926, The World Bank. [Downloadable!]
  8. Claudio Soto & Alberto Naudon & Eduardo López & Alvaro Aguirre, 2004. "Acerca del Nivel Adecuado de las Reservas Internacionales," Working Papers Central Bank of Chile 267, Central Bank of Chile. [Downloadable!]
  9. Shankar, Rashmi, 2005. "Insurance and liquidity : panel evidence," Policy Research Working Paper Series 3648, The World Bank. [Downloadable!]
Statistics
Access and download statistics

Did you know? All RePEc services are meant to be be free forever, as they are all run by volunteers.

This page was last updated on 2009-11-5.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.