Crisis Spillovers in Emerging Market Economies: Interlinkages, Vulnerabilities and Investor Behaviour

Bank of England Working Paper No. 212

40 Pages Posted: 4 Oct 2004

See all articles by Michael K.F. Chui

Michael K.F. Chui

Bank for International Settlements (BIS)

Simon Hall

Bank of England

Ashley Taylor

Bank of England

Date Written: February 2004

Abstract

Many emerging market economy (EME) financial crises in the 1990s quickly spread to other countries. By contrast, spillovers from the Argentina crisis in 2001-02 appear to have been much more limited. Why do some crises spread widely and others do not? This paper stresses the joint importance of intra-EME linkages, related country-specific vulnerabilities and investor behaviour. This framework provides insights into some potential reasons behind the differing extent of spillovers in two case studies - Asia 1997-98 and Argentina 2001-02. It also highlights the need for further analysis of the less easily measurable elements of the framework, in particular changes in investor behaviour.

Suggested Citation

Chui, Michael K.F. and Hall, Simon and Taylor, Ashley, Crisis Spillovers in Emerging Market Economies: Interlinkages, Vulnerabilities and Investor Behaviour (February 2004). Bank of England Working Paper No. 212, Available at SSRN: https://ssrn.com/abstract=598866 or http://dx.doi.org/10.2139/ssrn.598866

Michael K.F. Chui

Bank for International Settlements (BIS) ( email )

CH-4002 Basel, Basel-Stadt
Switzerland

Simon Hall (Contact Author)

Bank of England ( email )

Threadneedle Street
London, EC2R 8AH
United Kingdom

Ashley Taylor

Bank of England ( email )

Threadneedle Street
London, EC2R 8AH
United Kingdom

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