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Vanishing Contagion?

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Author Info
Sergio L. Schmukler
Tatiana Didier
Paolo Mauro

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Abstract

While a number of emerging market crises were characterized by widespread contagion during the 1990s, more recent crises (notably, in Argentina) have been mostly contained within national borders. This has led some observers to wonder whether contagion might have become a feature of the past, with markets now better discriminating between countries with good and bad fundamentals. This paper argues that a prudent working assumption is that contagion has not vanished permanently. Available data do not seem to point to a disappearance of the main channels that contribute to transmitting crises across countries. Moreover, anticipation of the Argentine crisis by international investors may help explain the recent absence of contagion.

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Paper provided by International Monetary Fund in its series IMF Policy Discussion Papers with number 06/01.

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Length: 24 pages
Date of creation: 25 Jan 2006
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Handle: RePEc:imf:imfpdp:06/01

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Keywords: Financial crisis ; Emerging markets ;

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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    Other versions:
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    Other versions:
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  18. Barry Eichengreen & Andrew K. Rose, 1999. "Contagious Currency Crises: Channels of Conveyance," NBER Chapters, in: Changes in Exchange Rates in Rapidly Development Countries: Theory, Practice, and Policy Issues (NBER-EASE volume 7), pages 29-56 National Bureau of Economic Research, Inc. [Downloadable!]
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Philipp Maier, 2007. "Do We Need the IMF to Resolve a Crisis? Lessons from Past Episodes of Debt Restructuring," Working Papers 07-10, Bank of Canada. [Downloadable!]
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