01933cas a2200241 a 4500 AALejournalIMF009022 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451863932 1018-5941 BD-DhAAL BD-DhAAL Catao, Luis. Sudden Stops and Currency Drops : A Historical Look / Luis Catao. Washington, D.C. : International Monetary Fund, 2006. 1 online resource (61 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students This paper shows that recent manifestations of sudden stops (SSs) in international capital flows have striking parallels in the early financial globalization era preceding World War I. All main capital-importing countries then faced episodic capital flow reversals averaging some 5 percent of GDP and with a median duration of four years. Most SSs also displayed striking crosscountry synchronization, being immediately preceded by rising world interest rates. Both fixed and floating exchange rate regimes were hit, with no significant differences between them. Yet, not all SSs resulted in currency drops: while some countries experienced currency collapses, others managed to preserve exchange rate stability. These different responses are related to domestic "frictions" that heightened the procyclicality of absorption and hindered precautionary reserve accumulation in some countries relative to others. Mode of access: Internet IMF Working Papers; Working Paper ; No. 2006/133 Full text available on IMF http://elibrary.imf.org/view/journals/001/2006/133/001.2006.issue-133-en.xml IMF e-Library