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This paper contributes to the literature on capital account crises in two ways. First, the analysis of crisis episodes between 1994 and 2002 establishes a clear relationship between the persistence of crises, their complexity, and the intensity of movement of key macroeconomic variables. Second, the author provides a systematic examination of the determinants of crisis duration. The econometric analysis suggests that initial conditions and the external environment play a key role in determining crisis persistence. The policy response also matters, but cannot offset a record of poor past policies. Overall, the results underscore the critical importance of crisis prevention efforts.
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