Contagion: Monsoonal Effects, Spillovers, and Jumps between Multiple Equilibria
32 Pages Posted: 15 Feb 2006
Date Written: September 1998
Several concepts of contagion are distinguished. It is argued that only models that admit of multiple equilibria are capable of producing true contagion. A simple balance of payments model is presented to illustrate that phenomenon, and some back-of-the-envelope calculations assess its relevance to the coincidence of emerging market crises in 1994-95 and in 1997.
Keywords: contagion, spillovers, multiple equilibria
JEL Classification: F3, F4
Suggested Citation: Suggested Citation