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Financial Crisis’ Propagation Through Investors


  • Ruxandra Dana Vilag

    () (Romanian American University, Bucharest)

  • George Horia Ionescu

    () (Romanian American University, Bucharest)


Propagation of financial crises and limit their impact is a concern of many economists. Work studies about contagion occurred primarily through information correlation or liquidity. The information channel related to price changes in one market is perceived to have implications on other market asset value, and so prices on this market should be amended accordingly. The liquidity channel implies that some market participants may need cash for various reasons, such as losses in another market, thus passing the shock between the two markets. To demonstrate the influence of investor behavior we chose to compare the development of the capital market in Romania with the European Union represented by Euronext. Comparing the results obtained in the two periods analyzed, extended period and the one that followed the outbreak of the crisis, we can say that there was a change in the Romanian market investors’ behavior.

Suggested Citation

  • Ruxandra Dana Vilag & George Horia Ionescu, 2013. "Financial Crisis’ Propagation Through Investors," Romanian Economic Business Review, Romanian-American University, vol. 8(1), pages 107-122, March.
  • Handle: RePEc:rau:journl:v:8:y:2013:i:1:p:107-122

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    References listed on IDEAS

    1. Grossman, Sanford J & Stiglitz, Joseph E, 1980. "On the Impossibility of Informationally Efficient Markets," American Economic Review, American Economic Association, vol. 70(3), pages 393-408, June.
    2. Kaminsky, Graciela L. & Reinhart, Carmen M., 2000. "On crises, contagion, and confusion," Journal of International Economics, Elsevier, vol. 51(1), pages 145-168, June.
    3. Broner, Fernando A. & Gaston Gelos, R. & Reinhart, Carmen M., 2006. "When in peril, retrench: Testing the portfolio channel of contagion," Journal of International Economics, Elsevier, vol. 69(1), pages 203-230, June.
    4. Shleifer, Andrei & Vishny, Robert W, 1997. " The Limits of Arbitrage," Journal of Finance, American Finance Association, vol. 52(1), pages 35-55, March.
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    Cited by:

    1. George Horia Ionescu & Ruxandra Dana Vilag, 2013. "Financial Stability And Development Of Capital Markets," Romanian Economic Business Review, Romanian-American University, vol. 8(3.1), pages 46-55, September.


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