The standard pattern: capital flows into the new “hot” nation, but then stop or reverses forcing painful adjustment. This column presents research based on such episodes from 181 nations during 1980-2007 and for a subset of 66 nations for the 1960-2007 period. If the pattern of the past few decades holds true, emerging market economies may be facing a darkening future.
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Reinhart, Carmen & Reinhart, Vincent, 2008.
"Is the US too big to fail?,"
MPRA Paper
12976, University Library of Munich, Germany.
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