Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/73356
Authors: 
Koehler-Geib, Fritzi
Year of Publication: 
2006
Series/Report no.: 
BGPE Discussion Paper 18
Abstract: 
We analyse the effect of the uncertainty about the fundamentals on the probability of sudden stops of capital flows from a theoretical and empirical perspective. Our model predicts that the probability of crises increases with the uncertainty, ie. the dispersion of private signals about the true value of the fundamentals. Using two datasets of Consensus and WES forecasts for 31 developed and developing countries for the time period from January 1990 until December 2001 we verify the theoretical prediction. We apply probit estimation controlling for time and country effects. Additionally, we show that the result is robust for numerous specifications.
Subjects: 
Capital Flows
Government debt
Sudden Stops
Global Games
Coordination Failure
JEL: 
C72
D82
D84
F21
F32
F34
F41
Document Type: 
Working Paper

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