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英国论文网:British and Dutch GDP:The spread of the cri(20)


reverses forcing painful adjustment. This column presents research based on such
episodes from 181 nations during 1980–2007 and for a subset of 66 nations for the
1960–2007 period. If the pattern of the past few decades holds true, emerging market
economies may be facing a darkening future.
A pattern has often been repeated in the modern era of global finance. Global
investors turn with interest toward the latest ‘foreign’ market. Capital flows in
volume into the ‘hot’ financial market. The exchange rate tends to appreciate,
asset prices to rally, and local commodity prices to boom. These favourable asset
price movements improve national fiscal indicators and encourage domestic
credit expansion. These, in turn, exacerbate structural weaknesses in the domestic
banking sector even as those local institutions are courted by global financial institutions
seeking entry into a hot market.
But tides also go out when the fancy of global investors shift and the ‘new paradigm’
looks shop worn. Flows reverse or suddenly stop à la Calvo1 and asset prices
give back their gains, often forcing a painful adjustment on the economy.
In a recent paper, we examined the macroeconomic adjustments surrounding
episodes of sizable capital inflows in a large set of countries.2 Identifying these
‘capital flow bonanzas’ turns out to be a useful organising device for understanding
the swings in investor interest in foreign markets as reflected in asset price
booms and crashes and for predicting sovereign defaults and other crises.
The bonanza episodes
For each of 181 countries, we defined a capital flow bonanza as an episode in
which there are larger-than-normal net inflows (operationally, those inflows bigger
than the 80th percentile of the entire sample). As can be seen in the share of
countries experiencing a capital bonanza year by year plotted in the figure below,
From capital flow bonanza to
financial crash
Carmen M Reinhart and Vincent Reinhart
University of Maryland; American Enterprise Institute
31
1 Calvo, Guillermo A., ‘Capital Flows and Capital-Market Crises: The Simple Economics of Sudden Stops,’ Journal
of Applied Economics 1, no. 1 (1998): 35–54.
2 ‘Capital Flow Bonanzas: An Encompassing View of the Past and Present,’ CEPR Discussion Paper 6996, October
2008.
32 The First Global Financial Crisis of the 21st Century Part II
3 The charts and tables below have been updated with the recently released IMF, World Economic Outlook
(October 2008).
bonanzas are clustered in time even though they were defined using country-specific
cutoffs.3
There were two eras of booms of boons over the past three decades. The first ran
from 1975 to 1982 and the world is living through the second—which appears to


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