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Current Account Reversals: Always a Problem?

  • Barry Eichengreen
  • Muge Adalet

Using panel data and case studies, we analyze the pre-1970 history of international capital flows and current account reversals. Considering a sample of emerging markets and advanced economies with per capita GDPs at least 60 per cent those of the lead country, we show that the incidence of reversals has been unusually great in recent years. The only prior period that matched the last three decades in terms of the frequency and magnitude of reversals was the 1920s and 1930s, decades notorious for the instability of capital flows. In contrast, reversals were both less common and smaller in the Bretton Woods and pre-World War I gold standard eras.

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File URL: http://www.nber.org/papers/w11634.pdf
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 11634.

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Date of creation: Sep 2005
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Publication status: published as Current Account Reversals: Always a Problem? , Muge Adalet, Barry Eichengreen. in G7 Current Account Imbalances: Sustainability and Adjustment , Clarida. 2007
Handle: RePEc:nbr:nberwo:11634
Note: DAE IFM ME
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  1. Barry Eichengreen & Michael D. Bordo, 2003. "Crises now and then: what lessons from the last era of financial globalization?," Chapters, in: Monetary History, Exchange Rates and Financial Markets, chapter 3 Edward Elgar.
  2. Guillermo A. Calvo, 2008. "Crises in Emerging Markets Economies: A Global Perspective," Central Banking, Analysis, and Economic Policies Book Series, in: Kevin Cowan & Sebastián Edwards & Rodrigo O. Valdés & Norman Loayza (Series Editor) & Klaus Schmidt- (ed.), Current Account and External Financing, edition 1, volume 12, chapter 3, pages 085-115 Central Bank of Chile.
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  7. J. D. Bailey, 1959. "Australian Borrowing In Scotland In The Nineteenth Century," Economic History Review, Economic History Society, vol. 12(2), pages 268-279, December.
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  11. Michael D. Bordo & Barry Eichengreen & Douglas A. Irwin, 1999. "Is Globalization Today Really Different than Globalization a Hunderd Years Ago?," NBER Working Papers 7195, National Bureau of Economic Research, Inc.
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  14. Sebastian Edwards, 2004. "Financial Openness, Sudden Stops and Current Account Reversals," NBER Working Papers 10277, National Bureau of Economic Research, Inc.
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