The Impact of Sudden Stops in Capital Flows on Output: Selected Emerging Markets
We evaluate how vulnerable the emerging markets are tosudden stops, that is, capital inflow reversals, using
panel data for 12 emerging economies for the period 1976-2002 that experienced such reversals. We investigate the impact
ofsudden stops on the macroeconomic indicators of economic growth by employing the Generalized Method of Moments
(GMM) estimation methodology. A robustness check is performedusing regional groups and introducing additional control
variables. We find that sudden stops have lagging, negative, and robust effect on output.
Keywords - Sudden Stops; Emerging Markets, Financial Crisis, Output, Capital Inflow