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Cross-Country Causes And Consequences Of The 2008 Crisis: International Linkages And American Exposure

Listed author(s):
  • AndrewK. Rose
  • MarkM. Spiegel

We model the causes of the 2008 financial crisis together with its manifestations, using a cross-country multiple indicator multiple cause model. We consider both national and, critically, international linkages between countries and potential crisis 'epicentres', including the United States. A country holding an epicentre's securities is exposed through a financial channel, while a country that exports to that epicentre is exposed through a real channel. We are unable to find strong evidence that international linkages can be associated with crisis incidence. In particular, exposure to the United States in either form has little impact. If anything, it appears to help. Copyright 2010 The Authors. Journal compilation 2010 Blackwell Publishing Asia Pty Ltd

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Article provided by Wiley Blackwell in its journal Pacific Economic Review.

Volume (Year): 15 (2010)
Issue (Month): 3 (08)
Pages: 340-363

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Handle: RePEc:bla:pacecr:v:15:y:2010:i:3:p:340-363
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