Crisis Transmission : Evidence from the Debt, Tequila, and Asian Flu Crises

This article analyzes how external crises spread across countries. The authors analyze the behavior of four alternative crisis indicators in a sample of 20 countries during three well-known crises: the 1982 debt crisis, the 1994 Mexican crisis, and the 1997 Asian crisis. The objective is twofold: to revisit the transmission channels of crises, and to analyze whether capital controls, exchange rate flexibility, and debt maturity structure affect the extent of contagion. The results indicate that there is a strong neighborhood effect. Trade links and similarity in pre-crisis growth also explain (to a lesser extent) which countries suffer more contagion. Both debt composition and exchange rate flexibility to some extent limit contagion, whereas capital controls do not appear to curb it.

Bibliographic Details

Main Authors:	De Gregorio, José, Valdés, Rodrigo O.
Format:	Journal Article biblioteca
Language:	English en_US
Published:	Washington, DC: World Bank 2001-05
Subjects:	ACCOUNTING, AGRICULTURE, ANNUAL GROWTH, ASSETS, BALANCE OF PAYMENTS, BALANCE OF PAYMENTS CRISES, BANK LENDING, BILATERAL TRADE, BUDGET DEFICIT, CAPITAL CONTROL, CAPITAL CONTROLS, CAPITAL INFLOWS, CAPITAL MOVEMENTS, CAPITAL TRANSACTIONS, COMPETITIVE DEVALUATION, COMPETITIVE DEVALUATIONS, CONSTANTS, CONSUMER PRICE INDEX, COUNTRY CREDIT, CREDIT BOOM, CREDIT BOOMS, CREDIT RATING, CREDIT RATINGS, CREDIT RISK, CRISES IN EMERGING MARKETS, CRISIS CONTAGION, CROSS-COUNTRY EXPERIENCE, CURRENCY, CURRENCY CRISES, CURRENCY CRISIS, CURRENT ACCOUNT, CURRENT ACCOUNT BALANCE, CURRENT ACCOUNT DEFICIT, CURRENT ACCOUNT DEFICITS, DATA AVAILABILITY, DEBT COMPOSITION, DEBT CRISIS, DEBT MATURITY, DEBT STRUCTURE, DEPENDENT VARIABLE, DEPOSITS, DEPRECIATION, DEVALUATION, DEVELOPING COUNTRIES, DEVELOPMENT ECONOMICS, DOMESTIC CREDIT, DUMMY VARIABLE, DUMMY VARIABLES, EMERGING MARKETS, EQUILIBRIUM, ERROR TERM, EXCHANGE ARRANGEMENTS, EXCHANGE RATE, EXCHANGE RATE FLEXIBILITY, EXCHANGE RATE REGIMES, EXCHANGE RESTRICTIONS, EXPLANATORY VARIABLE, EXTERNAL ASSETS, EXTERNAL DEBT, EXTERNAL SHOCK, EXTERNAL SHOCKS, FINANCIAL CRISES, FINANCIAL INTEGRATION, FINANCIAL SECTOR, FINANCIAL SUPPORT, FISCAL BALANCE, FIXED EXCHANGE RATE, FIXED EXCHANGE RATE REGIME, FLEXIBLE EXCHANGE RATE, FLEXIBLE EXCHANGE RATE REGIMES, FOREIGN DEBT, FOREIGN EXCHANGE, FOREIGN EXCHANGE MARKET, GDP, GLOBALIZATION, GROSS DOMESTIC PRODUCT, GROWTH RATE, INDUSTRIAL COUNTRIES, INFLATION, INSTITUTIONAL INVESTOR, INTERDEPENDENCE, INTEREST RATE SHOCK, INTEREST RATES, INTERNATIONAL BANK, INTERNATIONAL BANK LENDING, INTERNATIONAL CRISES, INTERNATIONAL CRISIS, INTERNATIONAL FINANCE, INTERNATIONAL FINANCIAL STATISTICS, INTERNATIONAL INTEREST, INTERNATIONAL INTEREST RATE, INTERNATIONAL RESERVES, INTERNATIONAL SETTLEMENTS, LEADING INDICATORS, M1, M2, MACROECONOMIC CONDITIONS, MACROECONOMIC VARIABLE, MARKET COMPETITION, MARKET PRESSURE, MARKET PRESSURES, MATURITY STRUCTURE, MISALIGNMENT, MONETARY FUND, MONEY SUPPLY, NARROW BANDS, OUTPUT, OUTPUT COLLAPSE, OVERVALUATION, PARTICULAR COUNTRY, PRICE INDEX, PRIVATE CREDIT, RATE OF GROWTH, RATE OF INFLATION, REAL DEPRECIATION, REAL EXCHANGE RATE, REAL EXCHANGE RATE APPRECIATION, REAL EXCHANGE RATE OVERVALUATION, REAL EXCHANGE RATES, REAL INTEREST, REAL INTEREST RATE, REAL SHOCKS, RETURNS, SHOCK PROXY, SHORT-TERM DEBT, STANDARD DEVIATION, STOCK MARKET, SURRENDER REQUIREMENT, TEQUILA CRISIS, TIME HORIZON, TOTAL CREDIT, TOTAL DEBT, TOTAL EXPORTS, TRADE PATTERN, TRANQUIL TIMES, TRANSMISSION MECHANISM, TRANSMISSION MECHANISMS, VOLATILITY, VULNERABILITY, WEIGHTS,
Online Access:	http://documents.worldbank.org/curated/en/2001/05/17737281/crisis-transmission-evidence-debt-tequila-asian-flu-crises https://hdl.handle.net/10986/17443
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