Crisis Transmission : Evidence from the Debt, Tequila, and Asian Flu Crises
This article analyzes how external crises spread across countries. The authors analyze the behavior of four alternative crisis indicators in a sample of 20 countries during three well-known crises: the 1982 debt crisis, the 1994 Mexican crisis, and...
| Main Authors: | , |
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| Format: | Journal Article |
| Language: | English en_US |
| Published: |
Washington, DC: World Bank
2014
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2001/05/17737281/crisis-transmission-evidence-debt-tequila-asian-flu-crises http://hdl.handle.net/10986/17443 |
| Summary: | This article analyzes how external
crises spread across countries. The authors analyze the
behavior of four alternative crisis indicators in a sample
of 20 countries during three well-known crises: the 1982
debt crisis, the 1994 Mexican crisis, and the 1997 Asian
crisis. The objective is twofold: to revisit the
transmission channels of crises, and to analyze whether
capital controls, exchange rate flexibility, and debt
maturity structure affect the extent of contagion. The
results indicate that there is a strong neighborhood effect.
Trade links and similarity in pre-crisis growth also explain
(to a lesser extent) which countries suffer more contagion.
Both debt composition and exchange rate flexibility to some
extent limit contagion, whereas capital controls do not
appear to curb it. |
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