Political contagion in currency crises

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National Bureau of Economic Research , Cambridge, MA
Financial crises -- Political aspects -- Econometric models., Foreign exchange rates -- Political aspects -- Econometric models., Devaluation of currency -- Political aspects -- Econometric models., International economic integration -- Political aspects -- Econometric models., Contagion (Social psychology) -- Economic aspects -- Econometric models., Monetary policy -- European Union countries -- Econometric mo
StatementAllan Drazen.
SeriesNBER working paper series -- working paper 7211, Working paper series (National Bureau of Economic Research) -- working paper no. 7211.
ContributionsNational Bureau of Economic Research.
Classifications
LC ClassificationsHB1 .W654 no. 7211
The Physical Object
Pagination31 p. ;
ID Numbers
Open LibraryOL22394943M

Political Contagion in Currency Crises Allan Drazen. Chapter in NBER book Currency Crises (), Paul Krugman, editor (p. 47 - 67) Books Recent Books Earlier Books (by decade) Browse books by Series Chapters from Books In Process Free Publications Bulletin on Retirement and Disability Cited by: Political Contagion in Currency Crises Allan Drazen.

NBER Working Paper No. Issued in July NBER Program(s):International Finance and Macroeconomics Existing models of contagious currency crises are summarized and surveyed, and it is argued that more weight should be put on political Cited by: 2.

Political Contagion in Currency Crises Allan Drazen Comment: Carmen M. Reinhart 3. Balance-of-Payments Crises in Emerging Markets: Large Capital Inflows and Sovereign Governments Guillermo A. Calvo Comment: Roberto Rigobon 4. The Onset of the East Asian Financial Crisis Steven Radelet and Jeffrey Sachs Comment: Frederic S.

Mishkin 5. Political Contagion in Currency Crises Allan Drazen Introduction The possibility of contagion in currency crises across countries is highly topical, to say the least. Though the phenomenon is widely discussed and is supported by solid empirical evidence,’ construction of convincing theo- retical models of contagion is still in its infancy.

Comments on: Alan Drazen, whose paper represents a first effort to formalize the role of political considerations in the process of how currency crises are transmitted across Political contagion in currency crises book borders.

The theoretical literature on “contagion” is scarce. The European currency crises ofthe Mexican crisis ofand especially the Asian/global crisis ofhave all contributed to a heightened interest in the early warning.

Comments on: Alan Drazen, whose paper represents a first effort to formalize the role of political considerations in the process of how currency crises are transmitted across international borders.

The theoretical literature on “contagion” is scarce, and the empirical literature equally so. Yet the EMS currency crises ofthe aftermath of the Mexican peso crisis of lateand.

Comment on "Political Contagion in Currency Crises" Carmen M. Reinhart. Chapter in NBER book Currency Crises (), Paul Krugman, editor (p. 67 - 70) Author: Carmen M Reinhart. Downloadable.

Existing models of contagious currency crises are summarized and surveyed, and it is argued that more weight should be put on political factors. Towards this end, the concept of political contagion introduced, whereby contagion in speculative attacks across currencies arises solely because of political objectives of countries.

A specific model of membership' contagion is presented. "Financial Crisis, Contagion, and Containment is though-provoking for economic and financial practitioners who want to better understand financial crises and the IMF's attendant policy responses. Although originally written inthe book remains relevant today."—MKB, Financial Analysts Journal.

1. Introduction. A prominent feature of the financial crises that have engulfed emerging market economies in recent years—the Mexican crisis of –95, the Asian crisis ofand the Russian crisis of —was the spread of financial difficulties from one economy to others in the same region and beyond in a process that has come to be referred to as “contagion”.

1 Political Contagion in Currency by Alan Drazen in Paul Krugman, ed., Currency Crises (Chicago: University of Chicago Press for the NBER, ), Comment Carmen M. Reinhart, University of Maryland, NBER, and CEPR Drazen’s paper represents a first effort to formalize the role of political.

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The Economics of Currency Crises and Contagion: An Introduction • Traditional models of currency crises suggest that weak or unsustainable economic policies are the cause of exchange rate instability.

These models provide a partial explanation of the Asian currency crisis. Downloadable. The recent waves of political crises in Africa and the Middle East have inspired the debate over how political instability could pose a risk of financial contagion to emerging countries.

With retrospect to the Kenyan political crisis, our findings suggest stock markets in Lebanon, Mauritius were contaminated while Nigeria experienced a positive spillover. CiteSeerX - Document Details (Isaac Councill, Lee Giles, Pradeep Teregowda): The possibility of contagion in currency crises across countries is highly topical, to say the least.

Though the phenomenon is widely discussed and is supported by solid empirical evidence, ’ construction of convincing theo-retical models of contagion is still in its infancy. Contagion in currency crises has come to be studied by economists only recently. Eichengreen, Rose and Wyplosz () provide a critical survey and some early evidence.

For the purposes of this study, we think of a currency crisis as being contagious if it spreads from the initial target(s), for whatever reason. As is well known, it is difficult to.

“ Political Contagion in Currency Crises. New York: Basic Books. Being the most popular tool to handle the effects of financial crisis contagion and the spreading of systemic risks, the. Currency Crises Paul Krugman, editor The University of Chicago Press, Cloth: $ ISBN: Table of Contents: Introduction Paul Krugman.

Currency Crises and Unemployment: Sterling in Barry Eichengreen and Olivier Jeanne. Comment: Michael D. Bordo. Political Contagion in Currency Crises Allan Drazen. Comment: Carmen. CiteSeerX - Document Details (Isaac Councill, Lee Giles, Pradeep Teregowda): Drazen’s paper represents a first effort to formalize the role of political considerations in the process of how currency crises are transmitted across international borders.

The theoretical literature on “contagion ” is scarce, and the empirical literature equally so. Downloadable (with restrictions). We analyse the effect of trade spillovers and of international coordination on currency crises. To do this, we present a model that builds on two separate literatures: the literature on international monetary cooperation on the one hand, and the literature on currency crises, or more precisely on the 'escape clause' approach of fixed exchange rate systems on.

Pinto, S. Ulatov, in The Evidence and Impact of Financial Globalization, The Country Crisis. Given the above, it is unsurprising that the contagion effects of Russia have been carefully studied.

4 But the country crisis episode itself has received scant attention in the literature, perhaps because of the belief that the lessons may not have been transferable to other emerging.

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The term "contagion" was first introduced in Julywhen the currency crisis in Thailand quickly spread throughout East Asia and then on to Russia and developed markets in North America and Europe were affected, as the relative prices of financial instruments shifted and caused the collapse of Long-Term Capital Management (LTCM), a large U.S.

hedge fund. Get this from a library. Fundamentals, contagion and currency crises: an empirical analysis. [Mark Kruger; Bank of Canada.] -- This paper examines the determinants of currency crises in Latin America, Asia, and Africa. It asks two basic questions: are currency crises linked to economic fundamentals, and is there evidence of.

This book is an authoritative account of the economic and political roots of the financial crisis. It examines why it was triggered in the United States, why it morphed into the great recession, and why the contagion spread with such ferocity around the globe.

The first book to explore what problems exist in the relationship between international relations and health, Containing Contagion frames contrasting views of global health agency within the current crises that are facing global health.

Providing an immediate, contemporary example of a region networking its response to disease outbreak events. Table 1 presents the results for the panel probit model of currency crisis based on data from the 20 OECD countries.

Examination of the coefficients on the contagion channels (trade, finance and macroeconomic similarity) 11 should indicate to us whether crisis elsewhere increases the probability of crisis in country i. In column A, the tests are made using absolute trade and financial. temporally correlated; that is, currency crises appear to pass “contagiously” from one country to another.

The paper provides a survey of the theoretical literature, and analyzes the contagious nature of currency crises empirically, Using thirty years of panel data from twenty industrialized countries, we find evidence of contagion.

Introduction / Paul Krugman. --Currency crisis and unemployment: Sterling in / Barry Eichengreen, Olivier Jeanne ; Comment / Michael D. Bordo. --Political contagion in currency crises / Allan Drazen ; Comment / Carmen M.

Reinhart. these regional economies. Hassan () examined the impact of the Asian currency crisis on the Bangladesh economy, as well as other Asian countries.

He suggests regulatory changes to help avoid a repeat of an Asian-type currency crisis. Baig and Goldfajn () found evidence of contagion in the currency and equity markets. Dec. 2, The World Bank projects that the crisis has cut world growth in half, to around 2%, and that unless Japan reverses the decline of its economy, the world could fall into recession in.

Downloadable (with restrictions)! Using the financial crisis as a laboratory, we analyze the transmission of crises to country-industry equity portfolios in 55 countries. We use an asset pricing framework with global and local factors to predict crisis returns, defining unexplained increases in factor loadings as indicative of contagion.This paper examines the determinants of currency crises in Latin America, Asia and Africa.

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It asks two basic questions: (a) Are currency crises linked to economic fundamentals? and; (b) Is there any evidence of a contagion effect after controlling for the potential effects of economic fundamentals? Using pooled annual data for 19 developing countries spanning […].CiteSeerX - Document Details (Isaac Councill, Lee Giles, Pradeep Teregowda): The possibility of contagion in currency crises across countries is highly topical, to say the least.

Though the phenomenon is widely discussed, and is supported by solid empirical evidence 1, construction of convincing theoretical models of contagion is still in its infancy.