Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/296097 
Year of Publication: 
2024
Series/Report no.: 
CESifo Working Paper No. 11008
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
We analyse how reversals of several types of capital flows impact currency crises in emerging market and developing economies. Estimates of logit models show that reversals of (equity and debt) portfolio flows significantly increase the likelihood of currency crises in emerging market economies. In developing economies, reversals of portfolio debt flows and banking flows have a significant positive impact on currency crises. Finally, our results suggest that countries with mature financial systems and fixed exchange rate regimes are less likely to experience a currency crisis after a capital flow shock. The mediating role of capital account liberalization varies by country type.
Subjects: 
capital flow reversals
currency crises
event study approach
logit models
domestic financial factors
JEL: 
E44
E51
F34
F41
Document Type: 
Working Paper
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