Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/39610
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dc.contributor.authorWeller, Christian E.en_US
dc.date.accessioned2010-09-01T09:48:39Z-
dc.date.available2010-09-01T09:48:39Z-
dc.date.issued1999en_US
dc.identifier.urihttp://hdl.handle.net/10419/39610-
dc.description.abstractRecent studies have conjectured that there may be a link between financial liberalization andfinancial instability in emerging economies. Most of these studies, however, do not investigatewhether emerging economies are becoming structurally more vulnerable to currency and bankingcrises. In this paper, we argue that emerging economies are systematically becoming moresusceptible to both currency and banking crises after FL. Using data for 27 emerging economiesfrom 1973 to the present, univariate and multivariate analyses indicate that the likelihood ofcurrency crises and banking crises increase after FL. In particular, liberalization allows moreliquidity to enter an emerging economy, which finds its way into productive and speculativeprojects. What is common to both types of crises is a significant increase in speculative financing,thereby increasing the chance for borrower default. Thus, the outflow of international capitalbecomes more likely, and we find that the chance of either type of crisis grows faster in responseto changes in short-term loans after FL than before. Similarly, the reactions to overvaluedcurrencies are at least similar in terms of increasing probabilities of crises in the case of bankingcrises, or greater in the case of currency crises after FL as compared to before FL. Further, ourresults show that after FL the chance of a currency crisis declines over time, while the chance ofa banking crisis increases.-
dc.language.isoengen_US
dc.publisher|aZEI |cBonnen_US
dc.relation.ispartofseries|aZEI working paper |xB 15-1999en_US
dc.subject.jelF02-
dc.subject.jelF36-
dc.subject.jelF43-
dc.subject.ddc330en_US
dc.subject.keywordEmerging economies-
dc.subject.keywordFinancial liberalization-
dc.subject.keywordfinancial instability-
dc.subject.keywordcurrency crises-
dc.subject.keywordbanking crises-
dc.subject.stwKapitalmarktliberalisierungen_US
dc.subject.stwSchätzungen_US
dc.subject.stwWährungskriseen_US
dc.subject.stwBankenkriseen_US
dc.subject.stwDevisenspekulationen_US
dc.subject.stwAufstrebende Mären_US
dc.titleFinancial crises after financial liberalization: Exceptional circumstances or structural weakness?en_US
dc.type|aWorking Paperen_US
dc.identifier.ppn82548667Xen_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungen-
dc.identifier.repecRePEc:zbw:zeiwps:B151999-

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