Guillermo Calvo

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Many emerging market countries have suffered Žnancial crises. One view blames soft pegs for these crises. Adherents of this view suggest that countries move to corner solutions—hard pegs or oating exchange rates. We analyze the behavior of exchange rates, reserves, and interest rates to assess whether there is evidence that country practice is moving(More)
Using a sample of 32 developed and developing countries we analyze the empirical characteristics of Sudden Stops in capital flows and the relevance of balance-sheet effects in the likelihood of their occurrence. We find that large real exchange rate (RER) fluctuations accompanied by Sudden Stops are basically an emerging market (EM) phenomenon. Sudden Stops(More)
In this paper we present evidence that capital account reversals have become more severe for emerging markets. Because policy options are limited in the midst of a capital market crisis and because so many countries have already had crises recently, we focus on some of the policies that could reduce the incidence of crises in the first place, or at least(More)
Few economists now question the validity of the Friedman-Phelps accelerationist hypothesis that the Phillips curve is vertical in the long run -at least as a first-order approximation. Indeed. the once controversial hvpothesis is now embodied in basic textboik macro models (see Rudiger Dornbusch and Stanlev Fischer. and Robert J. Gordon. for exampie). This(More)
Half a decade has passed since the resurgence of international capital flows to many developing countries. About US$460 billion of foreign capital has flowed to developing countries in Asia and Latin America in the five years 1990-94 or about three-and-a-half times the US$133 of the previous five years (Table 1), when there was a debt crisis and many of(More)
We offer an alternative explanation for the fall of Argentina’s Convertibility Program based on the country’s vulnerability to Sudden Stops in capital flows. Sudden Stops are typically accompanied by a substantial increase in the real exchange rate that wreaks havoc in countries that are heavily dollarized in their liabilities, turning otherwise sustainable(More)
This paper claims that the roots of Mexico’s balance-of-payments crisis are found in the prevailing high degree of capital mobility and financial globalization. Under these circumstances, shifts in foreign capital flows and anticipation of a banking-system bailout may produce large imbalances between stocks of financial assets and foreign reserves,(More)