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International Capital Movements, Financial Volatility and Financial Instability

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  • Frederic S. Mishkin

Abstract

This lecture outlines an asymmetric information theory of financial instability which describes the fundamental forces which harm both the financial sector and economic activity. This asymmetric information framework is then used to demonstrate that although international capital movements and financial volatility can play a role in destabilizing the economy is frequently overstated.

Suggested Citation

  • Frederic S. Mishkin, 1999. "International Capital Movements, Financial Volatility and Financial Instability," NBER Working Papers 6390, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:6390
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    References listed on IDEAS

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    7. Ben S. Bernanke & Mark Gertler, 1995. "Inside the Black Box: The Credit Channel of Monetary Policy Transmission," Journal of Economic Perspectives, American Economic Association, vol. 9(4), pages 27-48, Fall.
    8. Schwert, G.W., 1989. "Indexes Of United States Stock Prices From 1802-1987," Papers 89-04, Rochester, Business - General.
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    Citations

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    Cited by:

    1. Barry Eichengreen., 1998. "International Economic Policy in the Wake of the Asian Crisis," Center for International and Development Economics Research (CIDER) Working Papers C98-102, University of California at Berkeley.
    2. Nabi, Mahmoud Sami, 2001. "Banking Performance and Speculative Attacks Under Asymmetric Information," MPRA Paper 24515, University Library of Munich, Germany.
    3. Martin Schneider & Aaron Tornell, 2004. "Balance Sheet Effects, Bailout Guarantees and Financial Crises," Review of Economic Studies, Oxford University Press, vol. 71(3), pages 883-913.
    4. Lin, Pei-Chien & Huang, Ho-Chuan (River), 2012. "Banking industry volatility and growth," Journal of Macroeconomics, Elsevier, vol. 34(4), pages 1007-1019.
    5. Aaron Tornell, 2003. "Soft Landings (February 2000), with Martin Schneider," UCLA Economics Online Papers 241, UCLA Department of Economics.
    6. Kaufmann, Daniel & Mehrez, Gil & Schmukler, Sergio L., 2005. "Predicting currency fluctuations and crises: Do resident firms have an informational advantage?," Journal of International Money and Finance, Elsevier, vol. 24(6), pages 1012-1029, October.
    7. repec:spr:eurase:v:7:y:2017:i:2:d:10.1007_s40822-017-0066-0 is not listed on IDEAS
    8. Sebastian Edwards, 1999. "Crisis Prevention: Lessons from Mexico and East Asia," NBER Working Papers 7233, National Bureau of Economic Research, Inc.
    9. Gongpil Choi, 2001. "Structural changes and the scope of inflation targeting in Korea," Pacific Basin Working Paper Series 2001-05, Federal Reserve Bank of San Francisco.
    10. Heike Joebges, 2000. "Ursachen für die Häufung von "Zwillingskrisen" in Schwellenländern," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 69(1), pages 38-52.
    11. De Grauwe, Paul, 2000. "Controls on Capital Flows," Journal of Policy Modeling, Elsevier, vol. 22(3), pages 391-405, May.

    More about this item

    JEL classification:

    • E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles
    • F3 - International Economics - - International Finance

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