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Authordc.contributor.authorAgosín Trumper, Manuel 
Authordc.contributor.authorHuaita, Franklin es_CL
Admission datedc.date.accessioned2014-01-13T20:17:44Z
Available datedc.date.available2014-01-13T20:17:44Z
Publication datedc.date.issued2012-09
Cita de ítemdc.identifier.citationJournal of International Money and Finance 31 (2012) 1140–1155en_US
Identifierdc.identifier.otherdoi:10.1016/j.jimonfin.2011.12.015
Identifierdc.identifier.urihttp://repositorio.uchile.cl/handle/2250/128580
General notedc.descriptionArtículo de publicación ISI.en_US
Abstractdc.description.abstractThis paper applies the overreaction hypothesis of De Bont and Thaler [De Bont, W., Thaler, R., 1985. Does stock market overreact? Journal of Finance 40(3), 793-805], developed for stock price behavior, to capital flows to emerging markets. We find that a surge in capital flows, or what we call a capital boom, can predict future sharp contractions in capital flows, or sudden stops. We use a large list of possible economic fundamentals as control variables, and the results show that the best predictor of a sudden stop is a preceding capital boom. Moreover, the probability of a country undergoing a sudden stop increases considerably with the length of the boom: this probability more than doubles when the boom is three years old, and rises by three to four times when the boom lasts for four years. These results are interesting for two reasons. In the first place, they contradict previous studies that emphasize worsening fundamentals as the ultimate cause of a sudden stop. Second, they are of policy interest because of the enormous negative impacts that sudden stops have on the real economy. (C) 2011 Elsevier Ltd. All rights reserved.en_US
Lenguagedc.language.isoenen_US
Publisherdc.publisherELSEVIER SCI LTD.en_US
Type of licensedc.rightsAttribution-NonCommercial-NoDerivs 3.0 Chile*
Link to Licensedc.rights.urihttp://creativecommons.org/licenses/by-nc-nd/3.0/cl/*
Keywordsdc.subjectCRISES; MODELSen_US
Títulodc.titleOverreaction in capital flows to emerging markets: Booms and sudden stopsen_US
Document typedc.typeArtículo de revistaen_US


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Except where otherwise noted, this item's license is described as Attribution-NonCommercial-NoDerivs 3.0 Chile