Current Account Deficits, Sudden Stops, and International Reserves Accumulation
Bibliographic record
Abstract
This dissertation addresses the causes of and policy responses to the 1990s current account crises.The first chapter explores the relative importance of external shocks as key determinants of the significant increase of foreign reserves accumulated in many emerging market economies, and provides a comprehensive framework to assess the adequacy of reserve holdings.Using the case of Mexico, I find that more than two thirds of the increase in international reserves can be replicated by a linear combination of external shocks, without an abrupt regime shift after the Tequila crisis.I also find that Mexico has historically adopted an appropriate reserves policy, with 1994 being an exception.However, under the current reserves policy, there is a positive probability of a current account crisis in the near future.In chapter Two, I investigate the optimal reserves policy.The analysis predicts an optimal level of reserves in Mexico that is considerably higher than the actual level.When I account for the possibility of a bailout by the outside world in case of a crisis, Mexico's current reserves policy is in the range of my model's predictions.The final chapter proposes a new explanation for the existence and nature of sudden stops.In my model, a sudden stop forms a necessary solution to the moral hazard problem in investment and can be rationalized as part of an optimal lending strategy in the face of asymmetric information.
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How this classification was reachedexpand
Full frame distilled prediction
Teacher imitationNot calibrated prevalence, not ground truth. Human validation pending. Learned from the 10,348 direct Codex labels and 10,348 direct Gemma labels. Candidate is the union of thresholded teacher heads; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels or direct frontier model labels.
Codex and Gemma teacher scores by category
| Category | Codex | Gemma |
|---|---|---|
| Metaresearch | 0.000 | 0.000 |
| Meta-epidemiology (narrow) | 0.000 | 0.000 |
| Meta-epidemiology (broad) | 0.000 | 0.000 |
| Bibliometrics | 0.001 | 0.000 |
| Science and technology studies | 0.000 | 0.000 |
| Scholarly communication | 0.000 | 0.001 |
| Open science | 0.000 | 0.000 |
| Research integrity | 0.000 | 0.000 |
| Insufficient payload (model declined to judge) | 0.000 | 0.000 |
Machine scores (provisional)
The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.
Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.
score_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from itClassification
machine, unvalidatedMachine predicted; a candidate call from one teacher head, not a consensus.
How this classification was reached, model by model and score by score, is at the end of the page under "How this classification was reached".