Private capital flows and financial crises in emerging markets.

摘要

This dissertation consists of three empirical chapters that address different aspects of private capital flows and financial crises in Asian and Latin American emerging markets.; Chapter 1 studies the different channels through which economies become vulnerable to currency crises. Specifically, we examine whether the "third-generation" models of currency crises are able to explain the recent Asian and Latin American crises. We find that capital flows and lending booms do not necessarily make economies more vulnerable to crises. We also find that increases in governments' contingent liabilities, capital flight, short-term debt, and total external debt increase the probability of crises.; Chapter 2 investigates the implications of private capital flows for banking sector fragility in the recipient country. First, we estimate the impact of capital flows on bank credit to private sector. Second, we look at the case of Indonesia, Korea and Mexico to study the impact on capital flows on bank assets and liabilities. We find that lending booms are in fact associated with the surge in capital flows in these countries, despite central bank intervention to mitigate the effect of capital flows on credit expansion. We also find that the expansion in bank credit was channeled primarily to the private sector.; Chapter 3 examines the impact of capital flows on long-term economic growth in emerging markets. We test the hypotheses that gross capital flows are positively related to growth because they represent the benefits of international portfolio diversification, and that net capital promote growth because they lead to investment that generates positive externalities. We find that bank outflows have a positive impact on growth, while bank inflows are negatively associated with growth. We do not find a statistically significant relationship between either net total capital flows or foreign direct investment and economic growth in our sample.