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Duration of sudden stop spells: A hazard model approach


  • Mahama Samir Bandaogo
  • Yu‐chin Chen


Using a hazard‐based duration model, we analyze the determinants of the duration of a period of sudden stop, which is defined as a drop in capital inflow by two standard deviations, for at least two consecutive quarters. The hazard model estimates the conditional probability that the country exits the sudden stop today given that it experienced one until the end of last period. We find that a higher ratio of foreign exchange reserves to short‐term external debt shortens the duration of sudden stops. We also find that a higher global economic growth rate tends to shorten sudden stop spells. Our results are robust to various alternative specifications.

Suggested Citation

  • Mahama Samir Bandaogo & Yu‐chin Chen, 2020. "Duration of sudden stop spells: A hazard model approach," Review of International Economics, Wiley Blackwell, vol. 28(1), pages 105-118, February.
  • Handle: RePEc:bla:reviec:v:28:y:2020:i:1:p:105-118
    DOI: 10.1111/roie.12443

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    Cited by:

    1. Fabiani, Josefina & Fidora, Michael & Setzer, Ralph & Westphal, Andreas & Zorell, Nico, 2021. "Sudden stops and asset purchase programmes in the euro area," Working Paper Series 2597, European Central Bank.

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