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Varieties of Capital-Market Crises

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  • Guillermo A. Calvo

Abstract

In this post-modern world of high capital mobility, countries are being disciplined by the anonymous capital market. One view of the situation -perhaps the prevalent view among economists- is that Wall Street gets into your hair because you are running an unsustainable economic program and crises are bound to happen. A polar view is that countries are at the mercy of the capital market. This paper attempts to bring these views under one roof, putting special emphasis on balance-of-payment crises.

Suggested Citation

  • Guillermo A. Calvo, 1995. "Varieties of Capital-Market Crises," Research Department Publications 4008, Inter-American Development Bank, Research Department.
    • Handle: RePEc:idb:wpaper:4008
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    References listed on IDEAS

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    1. Easterly, William R., 1989. "Fiscal adjustment and deficit financing during the debt crisis," Policy Research Working Paper Series 138, The World Bank.
    2. Obstfeld, Maurice, 1986. "Rational and Self-fulfilling Balance-of-Payments Crises," American Economic Review, American Economic Association, vol. 76(1), pages 72-81, March.
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    5. Krugman, Paul, 1979. "A Model of Balance-of-Payments Crises," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 11(3), pages 311-325, August.
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    8. Calvo, Guillermo A, 1986. "Temporary Stabilization: Predetermined Exchange Rates," Journal of Political Economy, University of Chicago Press, vol. 94(6), pages 1319-1329, December.
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