Trade and Financial Contagion in Currency Crises
By F. Caramazza, Luca A Ricci, Ranil M Salgado. Social Science Research Network, 2000
223 citations recorded by the source corpus.
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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Citations in the corpus
- A Primer on Financial Contagion (2003, unknown): “Caramazza et al.(2000) Monthly data for 61 industrial and developing countries during 1990–98 Analyzes the impact of external and domestic macro economic balances, financial weaknesses, trade and financial linkages on the occurrence of crises.”
- Are Trade Linkages Important Determinants of Country Vulnerability to Crises (2001, background): “For example, see Caramazza, Ricci, and Salgado (2000), De Gregorio and Valdés (2001), or Gelos and Sahay (2001). either trade linkages or financial linkage are included in the model, the variables are usually highly significant.”