External Finance, Sudden Stops, and Financial Crisis
Author | : Mr.F. Gulcin Ozkan |
Publisher | : International Monetary Fund |
Total Pages | : 36 |
Release | : 2010-07-01 |
ISBN-10 | : 9781455201419 |
ISBN-13 | : 1455201413 |
Rating | : 4/5 (413 Downloads) |
Download or read book External Finance, Sudden Stops, and Financial Crisis written by Mr.F. Gulcin Ozkan and published by International Monetary Fund. This book was released on 2010-07-01 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper develops a two-country DSGE model to investigate the transmission of a global financial crisis to a small open economy. We find that economies hit by a sudden stop arising from financial distress in the global economy are likely to face a more prolonged crisis than sudden stop episodes of domestic origin. Moreover, in contrast to the existing literature, our results suggest that the greater a country's trade integration with the rest of the world, the greater the response of its macroeconomic aggregates to a sudden stop of capital flows.