A Minskian Analysis of Financial Crisis in Developing Countries
This paper provides a framework for examining developing-country financial crisis. It is based upon Hyman Minsky's financial fragility thesis and applied to the case of Thailand 1984-1999. There is empirical evidence for the evolution of the Thai economy through the Minskian regimes (hedged through speculative to Ponzi) in the period prior to the onset of the 1997 Asian crisis. Evidence also suggests that the Ponzi regime has two stages and that the rate of return on nonproductive speculative investment turns negative as the country entered the Ponzi regime. The diversion of foreign capital inflows to speculative investment played an important part in the deterioration of the Thai financial position. These results, if general, have strong implications for the field of country risk analysis, in particular, for the design of early warning models of financial crisis for developing countries.
|Date of creation:||Aug 2002|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.economicpolicyresearch.org
More information through EDIRC
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.:
- Anwar M. Shaikh, 1995.
"The Stock Market and the Corporate Sector: Profit-Based Approach,"
Economics Working Paper Archive
wp_146, Levy Economics Institute.
- Anwar M. Shaikh, 1998. "The Stock Market and the Corporate Sector: A Profit-Based Approach," Macroeconomics 9811007, EconWPA.
- Paul Krugman, 1999. "Balance Sheets, the Transfer Problem, and Financial Crises," International Tax and Public Finance, Springer, vol. 6(4), pages 459-472, November.
- Morris Goldstein & Carmen M. Reinhart, 2000. "Assessing Financial Vulnerability: An Early Warning System for Emerging Markets," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 100, May.
When requesting a correction, please mention this item's handle: RePEc:epa:cepawp:2002-09. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Bridget Fisher)
If references are entirely missing, you can add them using this form.