Volatility of the capital flows and structural breaks in Latin American and the Caribbean

Abstract

This paper studies the presence of structural breaks in the capital flows of sixteen economies of Latin America using the unit root test by Zivot and Andrews (1992). It is complemented by the structural break test by Bai Perron (1998). Afterwards, an analysis of the likelihood of contemporaneity between the breaks found and the crises the countries had suffered in the last forty years is presented. These crises were either of currency, banking, domestic and external debt type. Many cases of contemporaneity were found, especially with the crises that occurred at the end of the 90s.