IMF Working Papers Volume 2000 Issue 055: Trade and Financial Contagion in Currency Crises (2000)

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Trade and Financial Contagion in Currency Crises

Author:

Mr. Ranil M Salgado

Mr. Ranil M Salgado
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Mr. Luca A Ricci

Mr. Luca A Ricci
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Mr. Francesco Caramazza

Mr. Francesco Caramazza
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Series:: IMF Working Papers

Volume/Issue:: Volume 2000: Issue 055

Language:: English

Publication Date:: 01 Mar 2000

DOI:: https://doi.org/10.5089/9781451847611.001

ISBN:: 9781451847611

ISSN:: 1018-5941

Pages:: 46

Keywords:: WP; crisis; crisis country; emerging market; market; ERM crisis; Currency crises; emerging markets; contagion; trade and financial spillovers; financial market; crisis emerging market economies; emerging market crisis; balance of payments crisis; exchange rate appreciation; Emerging and frontier financial markets; Exchange rate arrangements; Currency markets; Global

Legal-disclaimer:: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Series:: IMF Working Papers

Volume/Issue:: Volume 2000: Issue 055

Language:: English

Publication Date:: 01 Mar 2000

DOI:: https://doi.org/10.5089/9781451847611.001

ISBN:: 9781451847611

ISSN:: 1018-5941

Pages:: 46

Keywords:: WP; crisis; crisis country; emerging market; market; ERM crisis; Currency crises; emerging markets; contagion; trade and financial spillovers; financial market; crisis emerging market economies; emerging market crisis; balance of payments crisis; exchange rate appreciation; Emerging and frontier financial markets; Exchange rate arrangements; Currency markets; Global

Legal-disclaimer:: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

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This paper investigates empirically the relevance of external, domestic, and financial weaknesses as well as trade and financial linkages in inducing financial crises for a sample of 61 emerging market and industrial countries. A panel probit estimation finds these economic indicators to be significant for emerging market countries during the Mexican, Asian, and Russian crises. In particular, the indicators of vulnerability to international financial spillover (common creditor) and of financial fragility (reserve adequacy) are highly significant and appear to explain the apparent regional concentration of these crises. Exchange rate regimes and capital controls, however, do not seem to matter.

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IMF Working Papers

ISSN:: 1018-5941

Publisher:: International Monetary Fund

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