Financial Crises and Contagion in Emerging Market Countries
Explores why some financial crises appear to be contagious, and why some financial markets in emerging market countries appear to be vulnerable to contagion whereas others are not. The authors analyze multicountry crisis episodes from January 1989 to August 1997 and develop four informal models of transition mechanisms: (1) "Economic linkages" describes the case where a foreign financial crisis acts as a common shock to countries with strong economic linkages to the country in crisis; (2) "heightened awareness" suggests that investors with incomplete information may ignore poor economic conditions in some countries until a crisis occurs somewhere else, at which point they dump their investments in those countries; (3) "portfolio adjustment" describes what happens when liquidity-constrained portfolio managers sell off other countries' assets in order to meet an expected increase in redemptions from a country in crisis; (4) "herd behavior" is probably the most widely accepted view of contagion, suggesting that investors abandon their investments largely in response to what they think other investors are doing. Finally, case studies of Argentina, South Africa, and Thailand illustrate the usefulness of the models.
- Format:
- Paperback, 75 Pages
- Year:
- 1998
- List Price:
- $10.00
- Price:
- $8.00 Special 20% Web Discount
- Full Document (pdf format) (File size 2.9 MB)
Use Adobe Acrobat Reader version 7.0 or higher for the best experience.
Document Details
- Copyright: RAND Corporation
- Availability: Available
- Format: Paperback
- Pages: 75
- List Price: $10.00
- Price: $8.00
- ISBN/EAN: 0-8330-2611-9
- Document Number: MR-962
- Year: 1998
- Series: Monograph Reports
Contents
Chapter 1
Introduction
Chapter 2
Crisis Identification
Chapter 3
Empirical Analysis
Chapter 4
Four Informal Models of Financial Contagion
Chapter 5
The Evolution of Financial Crises: Three Case Studies
Chapter 6
Conclusion
This report is part of the RAND Corporation monograph report series. The monograph/report was a product of the RAND Corporation from 1993 to 2003. RAND monograph/reports presented major research findings that addressed the challenges facing the public and private sectors. They included executive summaries, technical documentation, and synthesis pieces.
Permission is given to duplicate this electronic document for personal use only, as long as it is unaltered and complete. Copies may not be duplicated for commercial purposes. Unauthorized posting of RAND PDFs to a non-RAND Web site is prohibited. RAND PDFs are protected under copyright law. For information on reprint and linking permissions, please visit the RAND Permissions page.
The RAND Corporation is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.
RAND® is a registered trademark. Copyright © 1994-2012 RAND Corporation.