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Following the liberalization reforms of the late 80s and early 90s, several emerging market economies have experienced large and persistent trade deficits. This paper focuses on the Argentine experience, examining the extent to which trade imbalances in the 1990s resulted from income and relative price movements, as well as from shifts in foreign trade elasticities associated with structural changes. New estimates of export and import equations are presented using a broader set of variables than previous studies and distinguishing between intra and extra MERCOSUR trade. We find that considerable export sensitivity to world commodity prices, domestic absorption, and economic activity in Brazil, combined with a high income elasticity of imports, are key determinants of Argentina's trade balance. JEL classification codes: F11, F14, F31

The paper investigates the causes of currency crises in emerging markets. We estimate the probability of a currency crisis by applying maximum smoothly simulated likelihood to a dynamic LDV model. This approach allows us to take explicit account of the existence of intertemporal links between crises. The results show that currency crises are influenced by real, monetary, debt and global variables. Past banking crises are significant determinants of the probability of currency crises. Moreover, countries that sharply devalued in the past are less prone to experience another currency crisis. We find evidence of unobserved heterogeneity, which may reflect differences in the countries' institutional/historical background. Finally, the determinants of currency crises differ by type of exchange rate regime.