these explanations agree that for some reason, perhaps unrelated to economic fundamental, there was a loss of confidence by domestic and foreign investors in all emerging markets. this led to a fall in capital inflows and an increase in capital outflows that triggered, in some cases, a very large nominal depreciation and a stock market crash. At the same time, these explanations do not address exactly why this loss of confidence had such large effects on the exchange rate and stock market in some emerging market countries but not in others.