The probability of sudden stops of capital flows: The case of Albania

The main goal of this paper is to develop a better understanding of international capital flows based on the episode of sudden stop concept. first, we compute a sudden stop indicator (or our binary variable) in order to analyze movements in foreign capital flows. second, the probability of these episodes is estimated as a function of some economic fundamentals by running a probit estimation with quarterly data over the period 2004–2012.