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International Capital Crunches: The Time-Varying Role of Informational Asymmetries Author info | Abstract | Publisher info | Download info | Related research | Statistics Mody, Ashoka
Taylor, Mark P
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We examine the determinants of capital flows to four developing countries during the 1990s using an explicitly disequilibrium econometric framework in which the supply and demand for capital are not necessarily equal, and the actual amount of the flow is determined by the ‘short side’ of the market. We are thus able to detect instances of ‘international capital crunch’ — where capital flows are curtailed because of supply-side rationing — and to relate these instances to movements in the underlying fundamentals. The analysis highlights the role of asymmetric information — as distinct from the traditional concern with default risk — in conditioning capital flows.
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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number
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Date of creation: Feb 2003Date of revision:
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Keywords: asymmetric information ; capital flows ; disequilibrium ; rationing ; Other versions of this item:
Find related papers by JEL classification: F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements F34 - International Economics - - International Finance - - - International Lending and Debt Problems O19 - Economic Development, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
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