Sudden Stop
A sharp reversal of net capital inflows to an economy, typically triggered by a global risk-off episode, a domestic policy shock, or both. The term was coined by Guillermo Calvo and the framework names the predictable cascade that follows: outflows accelerate, the currency depreciates, dollar-denominated debt becomes harder to service, corporates default or cut investment, the central bank hikes rates to defend the currency, and the economy contracts -- the current account ultimately closes via import collapse rather than export growth. Sudden stops have caused most of the major emerging-market crises of the past 40 years.
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10Y Treasury · Altman Z-Score · Asset Sensitivity · Basel III · Bond ETF · Bretton Woods
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