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Latin America and East Asia in the Context of an Insurance Model of Currency Crises

Chinn, Menzie David; Dooley, Michael P.; Shrestha, Sona - 2021

This paper focuses on the 1995 Latin American and 1997 East Asian crises using an insurance-based model of financial crises. First the model of Dooley (forthcoming) is described. Second, some empirical evidence for an insurance model is presented. The key variables in this approach include the...

Persistent link: https://www.econbiz.de/10013227499

Transmission of the U.S. Subprime Crisis to Emerging Markets : Evidence on the Decoupling-Recoupling Hypothesis

Dooley, Michael P. - 2010

We find that emerging markets appeared to be somewhat insulated from developments in U.S. financial markets from early 2007 to summer 2008. From that point on, however, emerging markets responded very strongly to the deteriorating situation in the U.S. financial system and real economy. Policy...

Persistent link: https://www.econbiz.de/10013152377

The Two Crises of International Economics

Dooley, Michael P. - 2010

In this essay, we argue that key assumptions in international macroeconomic theory, though useful for understanding the economic relationships among developed countries, have been pushed beyond their competence to include relationships between developed economies and emerging markets. The...

Persistent link: https://www.econbiz.de/10012759976

No Contagion, Only Interdependence : Measuring Stock Market Co-Movements

Forbes, Kristin J. - 2001

This paper examines stock market co-movements. It begins with a discussion of several conceptual issues involved in measuring these movements and how to test for contagion. Standard tests examine if cross-market correlation in stock market returns increase during a period of crisis. The measure...

Persistent link: https://www.econbiz.de/10012788161

The Asian Flu and Russian Virus : Firm-Level Evidence on How Crises are Transmitted Internationally

Forbes, Kristin J. - 2022

This paper uses firm-level information to evaluate how crises are transmitted internationally. It constructs a new data set of financial statistics, industry information, geographic data, and stock returns for over 10,000 companies in 46 countries to test what types of firms were most affected...

Persistent link: https://www.econbiz.de/10013322873

The "Big C" : Identifying Contagion

Forbes, Kristin J. - 2012

contagion, highlighting contagion risks in the euro area. The paper defines "interdependence" as high correlations across … increased dramatically over time, especially within the euro area, even after controlling for global shocks and changes in … analyzing policies designed to mitigate contagion, especially for the current crisis in the euro area …

Persistent link: https://www.econbiz.de/10013099134

Contagion in Latin America : Definitions, Measurement, and Policy Implications

Forbes, Kristin J.; Rigobon, Roberto - 2021

This paper analyzes bond and stock markets in Latin America and uses these patterns to investigate whether contagion occurred in the 1990's. It defines shift-contagion' as a significant increase in cross-market linkages after a shock to one country or region. Several coin-toss examples and a...

Persistent link: https://www.econbiz.de/10013219176

Rescue Packages and Output Losses Following Crises

Dooley, Michael P.; Verma, Sujata - 2021

This paper examines the role of the third party (the IMF) in resolving sovereign default on external debt. We first show that the effects of third party intervention in debt negotiations are quite sensitive to the assumed enforcement mechanism for sovereign debt. The model is then adapted to an...

Persistent link: https://www.econbiz.de/10013238696

Can Output Losses Following International Financial Crises Be Avoided?

Dooley, Michael P. - 2021

Recent financial crises in emerging markets have been followed by temporary but substantial losses in output. This paper explores the possibility that threats of such losses are the dominant incentive for repayment of international debt. In this environment private debtors and creditors have...

Persistent link: https://www.econbiz.de/10013249353

Are Trade Linkages Important Determinants of Country Vulnerability to Crises?

Forbes, Kristin J. - 2021

This paper measures whether trade linkages are important determinants of a country's vulnerability to crises that originate elsewhere in the world. It explains that trade can transmit crises internationally via three distinct, and possible counteracting, channels: a competitiveness effect (when...

Persistent link: https://www.econbiz.de/10013313643