Advanced Search
MyIDEAS: Login to save this paper or follow this series

The swings in capital flows and the brazilian crisis

Contents:

Author Info

  • Ilan Goldfajn

    ()
    (Department of Economics PUC-Rio)

Registered author(s):

    Abstract

    The paper analyzes the Brazilian crisis with emphasis on the role of capital flows and the players involved. It concludes that while foreign investors (both banks and institutional investors) were long in Brazil, the speculation against the currency was not overwhelming. Once their position changed, the crisis erupted. But the change in position cannot be attributed to either a compensatory liquidation of assets story by foreign investor caused by the Russian crisis, neither to the effect of international interest rates. Brazil’s better than expected macroeconomic performance in the aftermath of the crisis was partly due to the fact that the private sector was largely hedged at the moment of the crisis and was insulated from the immediate effects of the devaluation. In addition, the reasons for a low passthrough of the exchange rate depreciation to inflation are related to a depressed level of demand after the crisis that discouraged the passthrough and a previous overvaluation of the exchange rate that was corrected by the nominal devaluation.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. 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.econ.puc-rio.br/pdf/td422.pdf
    Download Restriction: no

    Bibliographic Info

    Paper provided by Department of Economics PUC-Rio (Brazil) in its series Textos para discussão with number 422.

    as in new window
    Length: 39 pages
    Date of creation: Mar 2000
    Date of revision:
    Handle: RePEc:rio:texdis:422

    Contact details of provider:
    Postal: Rua Marquês de São Vicente, 225, 22453-900 Rio de Janeiro, RJ
    Phone: 021 35271078
    Fax: 021 35271084
    Web page: http://www.econ.puc-rio.br
    More information through EDIRC

    Related research

    Keywords:

    This paper has been announced in the following NEP Reports:

    References

    References listed on IDEAS
    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.:
    as in new window
    1. Claessens, Stijn & Dooley, Michael P & Warner, Andrew, 1995. "Portfolio Capital Flows: Hot or Cold?," World Bank Economic Review, World Bank Group, vol. 9(1), pages 153-74, January.
    2. Cardenas, Mauricio & Barrera, Felipe, 1997. "On the effectiveness of capital controls: The experience of Colombia during the 1990s," Journal of Development Economics, Elsevier, vol. 54(1), pages 27-57, October.
    3. Guillermo A. Calvo & Leonardo Leiderman & Carmen M. Reinhart, 1996. "Inflows of Capital to Developing Countries in the 1990s," Journal of Economic Perspectives, American Economic Association, vol. 10(2), pages 123-139, Spring.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as in new window

    Cited by:
    1. William C. Gruben & John H. Welch, 2001. "Banking and currency crisis recovery: Brazil's turnaround of 1999," Economic and Financial Policy Review, Federal Reserve Bank of Dallas, issue Q IV, pages 12-23.

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:rio:texdis:422. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.