Sudden Stops and COVID-19: Lessons from Mexico’s History

Gianluca Benigno, Andrew Foerster, Christopher Otrok and Alessandro Rebucci ()

FRBSF Economic Letter, 2020, vol. 2020, issue 33, 01-05

Abstract: The COVID-19 pandemic produced a sharp contraction in capital flows in emerging markets during the spring of 2020. Such contractions are known as “sudden stops” and historically have been associated with significant downturns in a country’s economic activity. Evidence from Mexico’s financial crisis history suggests that sudden stops tend to exhibit a common pattern: the crisis lasts one to two years before a rapid but partial recovery, followed by years of protracted stagnation.

Keywords: covid-19; Financial crises - Mexico (search for similar items in EconPapers)
Date: 2020
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