Crash-Free Sequencing Strategies for Financial Development and Liberalization
21 Pages Posted: 29 Dec 1998
Date Written: September 1998
In the context of a stylized model of financial intermediation, this paper characterizes the circumstances along the paths of financial development, financial liberalization and economic growth that can trigger a financial crisis. It shows how to avoid financial crises through the proper sequencing of various financial development and liberalization measures. Usually, financial development should accompany, and even take priority over, financial liberalization. This is especially true in the case of fast growing economies.
JEL Classification: E44, F3, G15
Suggested Citation: Suggested Citation