Estimation and out-of-sample Prediction of Sudden Stops : Do Regions of Emerging Markets Behave Differently from Each Other?

We identify episodes of sudden stops in emerging economies and estimate the probability toobserve them. Sudden stops are more likely when global growth falters, risk aversion infinancial markets rises, and vulnerabilities in the external and financial sectors increase.However, the significance of the explanatory variables vary across regions. In Latin Americaand Eastern Europe, gross capital inflows are more responsive to changes in global growththan in Asia. Trade linkages tend to be more important than financial linkages in EasternEurope, while in Asia and Latin America the opposite is true. The model captures only athird of sudden stops outside the estimation sample, but issues reliable sudden stop signals.