Multiple Equilibria, Contagion, and the Emerging Market Crises

Author/Editor:

Paul R Masson

Publication Date:

December 1, 1999

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

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. 99/164

Subject:

English

Publication Date:

December 1, 1999

ISBN/ISSN:

9781451857979/1018-5941

Stock No:

WPIEA1641999

Price:

$15.00 (Academic Rate:$15.00)

Format:

Paper

Pages:

25

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