Some Methodological Issues Sugata Marjit Saibal Kar This paper tries to build up a simple index which captures the financial volatility of an open economy. Judged by this index, a cross-country study of 21 developing nations over 1993-95 suggests that Thailand and Malaysia, in spite of having strong macro fundamentals, were vulnerable to financial crisis, India performs quite well in terms of the index. However, we argue that such 'performance' does not justify unfettered movement of short- term capital.