Study on the quantitative relationship between the capital account openness degree and financial crisis

In this paper, we extended the model of Computable General Equilibrium (CGE) to the general equation about capital flow, and applied it to study the relationship of the expected rate of loss of foreign reserves and foreign capital flow to Brazil, Russia or India. The empirical results showed that as the loss of foreign reserves decreasing, foreign capital flow would increase, and then the probability of finance crises outbreak would be increased.