Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/146586
Authors: 
Makrem, Ben Doudou
Year of Publication: 
2014
Citation: 
[Journal:] Atlantic Review of Economics [ISSN:] 2174-3835 [Volume:] 2 [Year:] 2014 [Pages:] 1-18
Abstract: 
In this paper, we present the root cause of the American financial crisis in 2007. We show that financial integration and capital flow volatility is the factor that creates a climate conducive to the emergence of the crisis in the USA and led to its spread to the rest of the world. On the theoretical side, we show that capital flows to the United States in recent years had a pro-cyclical character. We show also that this behavior was the root cause of the crisis and even previous crises such as the Mexican crisis in 1994 and the Asian crisis in 1998. Empirically, we use recent panels data to show that financial integration can lead to financial crises by increasing the volatility of capital flows.
Subjects: 
financial integration
capital flow volatility
crisis
economic growth
Tobin tax
JEL: 
F36
F20
O11
Document Type: 
Article

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