Multiple Equilibria, Contagion, and the Emerging Market Crises
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Summary:
The paper surveys the types of models producing multiple equilibria in financial markets. It argues that such models are consistent with observed phenomena, such as the greater volatility of financial asset prices than of macroeconomic fundamentals. Alternative explanations are compared with the stylized facts concerning capital flows, portfolio shifts, and exchange rate crises. Implications for crisis prediction and prevention are then discussed.
Series:
Working Paper No. 1999/164
Subject:
Asset and liability management Asset prices Balance of payments Banking Capital flows Emerging and frontier financial markets Financial crises Financial markets Liquidity Prices
English
Publication Date:
December 1, 1999
ISBN/ISSN:
9781451857979/1018-5941
Stock No:
WPIEA1641999
Pages:
25
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