Capital inflows, crisis and recovery in small open economies
We compare two small open economics, Iceland and Ireland, that experienced a capital inflow through their banking systems in the period preceding the 2008 financial crises but differ in their currency arrangements. Both countries have mostly recovered from their respective crises, but the difference...
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ftrepec:oai:RePEc:eee:finlet:v:27:y:2018:i:c:p:273-282 2024-04-14T08:13:39+00:00 Capital inflows, crisis and recovery in small open economies Raza, Hamid Zoega, Gylfi Kinsella, Stephen http://www.sciencedirect.com/science/article/pii/S1544612318300941 unknown http://www.sciencedirect.com/science/article/pii/S1544612318300941 article ftrepec 2024-03-19T10:30:10Z We compare two small open economics, Iceland and Ireland, that experienced a capital inflow through their banking systems in the period preceding the 2008 financial crises but differ in their currency arrangements. Both countries have mostly recovered from their respective crises, but the differences in the way their economies adjusted are interesting. The evidence suggests that changes in the real exchange rate served as the adjusting mechanism for Iceland's current account while in Ireland domestic demand compression served as the main adjustment mechanism. We also explore the adjustment to the crisis in three other Eurozone economies and find that they were similar to the one in Ireland. Sudden stop; Real exchange rates; Demand compression; Article in Journal/Newspaper Iceland RePEc (Research Papers in Economics) |
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Open Polar |
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RePEc (Research Papers in Economics) |
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description |
We compare two small open economics, Iceland and Ireland, that experienced a capital inflow through their banking systems in the period preceding the 2008 financial crises but differ in their currency arrangements. Both countries have mostly recovered from their respective crises, but the differences in the way their economies adjusted are interesting. The evidence suggests that changes in the real exchange rate served as the adjusting mechanism for Iceland's current account while in Ireland domestic demand compression served as the main adjustment mechanism. We also explore the adjustment to the crisis in three other Eurozone economies and find that they were similar to the one in Ireland. Sudden stop; Real exchange rates; Demand compression; |
format |
Article in Journal/Newspaper |
author |
Raza, Hamid Zoega, Gylfi Kinsella, Stephen |
spellingShingle |
Raza, Hamid Zoega, Gylfi Kinsella, Stephen Capital inflows, crisis and recovery in small open economies |
author_facet |
Raza, Hamid Zoega, Gylfi Kinsella, Stephen |
author_sort |
Raza, Hamid |
title |
Capital inflows, crisis and recovery in small open economies |
title_short |
Capital inflows, crisis and recovery in small open economies |
title_full |
Capital inflows, crisis and recovery in small open economies |
title_fullStr |
Capital inflows, crisis and recovery in small open economies |
title_full_unstemmed |
Capital inflows, crisis and recovery in small open economies |
title_sort |
capital inflows, crisis and recovery in small open economies |
url |
http://www.sciencedirect.com/science/article/pii/S1544612318300941 |
genre |
Iceland |
genre_facet |
Iceland |
op_relation |
http://www.sciencedirect.com/science/article/pii/S1544612318300941 |
_version_ |
1796311674578272256 |