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This paper develops a model that focuses on the interaction of liquidity creation by financial intermediaries with capital flows and exchange rate collapses. The intermediaries’ role of transforming maturities is shown to result in larger movements of capital and a higher probability of crisis. These movements resemble the observed cycle in capital flows: large inflows, crisis and abrupt outflows. The model highlights how adverse productivity and international interest rate shocks may trigger a sudden outflow of capital and an exchange collapse. The initial shock is magnified by the behavior of individual foreign investors linked through their deposits in the intermediaries. The expectation of an eventual exchange rate crisis links investors’ behavior even further.

Exports and Imports --- Finance: General --- Foreign Exchange --- International Investment --- Long-term Capital Movements --- Portfolio Choice --- Investment Decisions --- International economics --- Currency --- Foreign exchange --- Finance --- Capital outflows --- Exchange rates --- Capital inflows --- Capital flows --- Liquidity --- Capital movements --- Economics --- United States

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This paper develops simple guidelines for fiscal policy in oil producing countries, focusing on three issues: intergenerational oil distribution, precautionary saving, and adjustment costs. The paper presents a framework to analyze how the revenue generated by an exhaustible source of wealth that belongs to the government should be distributed between current and future generations. This framework is used to show the strengths and limitations of existing answers, which motivates a new approach for dealing with this question. The paper derives simple, closed form approximations to the optimal level of government expenditure when an important part of government revenue is generated by an uncertain and exhaustible natural resource such as oil. Price uncertainty, budget uncertainty, and the (possibly asymmetric) costs of adjusting expenditure levels are considered.

Investments: Energy --- Macroeconomics --- Public Finance --- Fiscal Policy --- National Deficit Surplus --- Debt --- Debt Management --- Sovereign Debt --- Macroeconomics: Consumption --- Saving --- Wealth --- Aggregate Factor Income Distribution --- Energy: Demand and Supply --- Prices --- Energy: General --- National Government Expenditures and Related Policies: General --- Investment & securities --- Public finance & taxation --- Consumption --- Income --- Oil prices --- Oil --- Expenditure --- National accounts --- Commodities --- Economics --- Petroleum industry and trade --- Expenditures, Public --- Kuwait

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Latin America: Outlook and Challenges Ahead.

Investments: Commodities --- Finance: General --- Foreign Exchange --- Macroeconomics --- Criminology --- Labor --- Commodity Markets --- Labor Economics: General --- Bureaucracy --- Administrative Processes in Public Organizations --- Corruption --- General Financial Markets: General (includes Measurement and Data) --- Human Capital --- Skills --- Occupational Choice --- Labor Productivity --- Labour --- income economics --- Investment & securities --- Corporate crime --- white-collar crime --- Finance --- Commodity prices --- Commodities --- Financial integration --- Prices --- Crime --- Financial markets --- Exchange rate arrangements --- Foreign exchange --- Labor economics --- Commercial products --- International finance --- China, People's Republic of

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This paper studies the determinants of private capital flows to developing countries during the last two episodes of large inflows, the late 1970s-early 1980s and the 1990s. The paper also tests for contagion effects in capital flows among recipient countries, and tries to identify specific channels through which such effects can occur. It tests for neighborhood effects, trade-related effects, and for contagion based on the countries having similar macroeconomic indicators. The results show strong evidence for the first two effects during the 1990s, and indicate that the third effect varies depending on the type of capital flow.

Exports and Imports --- International Finance: General --- Macroeconomic Aspects of International Trade and Finance: General --- International Financial Markets --- International Investment --- Long-term Capital Movements --- Trade: General --- International economics --- Finance --- Private capital flows --- Capital flows --- Capital inflows --- Foreign direct investment --- Exports --- Balance of payments --- International trade --- Capital movements --- Investments, Foreign --- Brazil

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Developing countries: economic development problems --- Latin America