TY  - JOUR
AU  - Calvo,Guillermo A.
AU  - Talvi,Ernesto
TI  - Sudden Stop, Financial Factors and Economic Collpase in Latin America: Learning from Argentina and Chile
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 11153
PY  - 2005
Y2  - February 2005
UR  - http://www.nber.org/papers/w11153
L1  - http://www.nber.org/papers/w11153.pdf
N1  - Author contact info:
Guillermo A. Calvo
Columbia University
School of International and Public Affairs
420 West 118th St, Room 1303B
MC3332
New York, NY 10027
Tel: 212/854-4264
E-Mail: gc2286@columbia.edu

Ernesto Talvi
AB  - This paper shows that the Russian 1998 crisis had a big impact on capital flows to Emerging Market Economies, EMs, especially in Latin America, and that the impact of the Russian shock differs quite markedly across EMs. To illustrate this statement, we compare the polar cases of Chile and Argentina. While Chile exhibited a significant economic slowdown after August 1998, it did not suffer the excruciating collapse suffered by Argentina, where even the payments system came to a full stop. We attribute their difference to the fact that Chile is more open to trade than Argentina, and that it appears to suffer much less from balance-sheet currency-denomination mismatch that was rampant in Argentina before the 2002 crisis (due to large domestic liability dollarization). The paper is essentially descriptive but is in line with and, thus, complements econometric studies like Calvo, Izquierdo and Mejia (NBER Working Paper 10520). The final section addresses policy issues in light of the paper's findings and conjectures.
ER  -