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

  • Michael Chui
  • Simon Hall
  • Ashley Taylor

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
Date of revision:
Handle: RePEc:boe:boeewp:212
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