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Crisis spillovers in emerging market economies: interlinkages, vulnerabilities and investor behaviour

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  • Michael Chui
  • Simon Hall
  • Ashley Taylor

Abstract

Many emerging market economy (EME) financial crises in the 1990s quickly spread to other countries. By contrast, spillovers from the Argentina crisis in 2001-02 appear to have been much more limited. Why do some crises spread widely and others do not? In this paper the joint importance of intra-EME linkages, related country-specific vulnerabilities and investor behaviour are stressed. This framework provides insights into some potential reasons behind the differing extent of spillovers in two case studies - Asia 1997-98 and Argentina 2001-02. It also highlights the need for further analysis of the less easily measurable elements of the framework, in particular changes in investor behaviour.

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Paper provided by Bank of England in its series Bank of England working papers with number 212.

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Date of creation: Feb 2004
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Handle: RePEc:boe:boeewp:212

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Cited by:
  1. Moritz Cruz & Bernard Walters, 2008. "Is the accumulation of international reserves good for development?," Cambridge Journal of Economics, Oxford University Press, Oxford University Press, vol. 32(5), pages 665-681, September.
  2. George Horia Ionescu & Dragos Mihai Ungureanu & Ruxandra Dana Vilag & Florian Bogdan Stoian, 2009. "Financial Contagion And Investors Behavior," Annales Universitatis Apulensis Series Oeconomica, Faculty of Sciences, "1 Decembrie 1918" University, Alba Iulia, Faculty of Sciences, "1 Decembrie 1918" University, Alba Iulia, vol. 1(11), pages 57.
  3. Luis F. Brunstein, 2008. "Policies to reduce instability," REVISTA DE ECONOM√ćA DEL CARIBE, UNIVERSIDAD DEL NORTE.

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