Financial Crises: Explanations, Types, and Implications; by Stijn Claessens and M. Ayhan Kose; imf working Paper 13/28; January 1, 2013

Balance-of-payments crises  and other parallel episodes can similarly be identified using 

capital flows data. Although there are some differences in approaches (e.g., how reserves 

losses are treated) and statistical variations across studies (e.g., whether the same current 

account deficit threshold is used for all countries or whether country-specific variables 

thresholds are used), but many of them point to similar samples of actual events. Forbes and 

Warnock (2012) analyze for a large set of countries gross flows, instead of the more typical 

net capital flows (or current account). They identify episodes of extreme capital flow 

movements using quarterly data, differentiating activity by foreigners and domestics. They 

classify episodes as “surge”, “stop”, “flight,” or “retrenchment, with surges and stops related 

respectively to periods of large gross capital in- or outflows by foreigners, and flights and 

retrenchments respectively related to periods of large capital out- or inflows by domestic 

residents.