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Financial Contagion and Herding: The Theory

This section presents papers that explain contagion due to financial links or due to herding behavior in international financial markets. Regarding herding, we omit a vast literature on herding behavior in the domestic financial markets. We only post papers that relate herding with cross-country spillover effects.

Asset Bubbles, Domino Effects and Lifeboats: Elements of the East Asian Crisis
Hali J. Edison
Pongsak Luangaram
Marcus Miller
International Finance Discussion Papers
The Federal Reserve Board
3/1/1998
Click here to access - 86 KB PDF
 
 
 
Capital Flows to Emerging Markets: Liberalization, Overshooting, and Volatility
Philippe Bacchetta
Eric van Wincoop
NBER Working Paper No. W6530
National Bureau of Economic Research
4/1/1998
Click here to access - 1,367 KB PDF
 
 
 
Channels for Financial Contagion, The
Matthew Pritsker - Economist, The Federal Reserve Board
8/11/2000
Click here to access - 207 KB PDF
 
 
 
Contagion and Volatility with Imperfect Credit Markets
Pierre-Richard Agenor
Joshua Aizenman
NBER Working Paper No. W6080
National Bureau of Economic Research
7/1/1997
Click here to access - 1,031 KB PDF
 
 
 
Contagion as a Wealth Effect
Albert S. Kyle, Fuqua School of Business, Duke University
Wei Xiong, Benheim Center for Finance, Princeton University
6/1/2000
Click here to access - 715 KB PDF
 
 
 
Contagion in Emerging Markets: When Wall Street is a Carrier
Guillermo A. Calvo, University of Maryland
5/2/1999
Click here to access - 93 KB PDF
 
 
 
Contagion of Self-Fulfilling Financial Crises Due to Diversification of Investment Portfolios
Italy Goldstein
Ady Pauzner, Eitan Berglas School of Economics, Tel Aviv University
6/5/2001
Click here to access - 671 KB PDF
 
 
 
Contagion, Bank Lending Spreads and Output Fluctuations
Pierre-Richard Agenor
Joshua Aizenman
A. Hoffmaister
NBER Working Paper No. W6850
National Bureau of Economic Research
12/1/1998
Click here to access - 859 KB PDF
 
 
 
Contagion-Monsoonal Effects, Spillovers, and Jumps Between Multiple Equilibria
Paul Masson, International Monetary Fund
3/2/998
Click here to access - 1,547 KB PDF
 
 
 
Emerging Market Crises: An Asset Markets Perspective
Ricardo J. Caballero
Arvind Krishnamurthy
NBER Working Paper No. W6843
National Bureau of Economic Research
12/1/1998
Click here to access - 2,841 KB PDF
 
 
 
Emerging Markets Contagion: Evidence and Theory
Rodrigo Valdes, Banco Central de Chile
3/1/1997
Click here to access - website
 
 
 
Financial Contagion
Franklin Allen
Douglas Gale
Journal of Political Economy (US); 108, No. 1
2/1/2000
Click here to access - Coming Soon
 
 
 
Financial Contagion
Frankln Allen, University of Pennsylvania
Gale Douglas, New York University
10/1/1998
Click here to access - 218 KB PDF
 
 
 
Financial Contagion: ABC Channels
Haizhou Huang
IMF Research Bulletin; 1 No. 2
International Monetary Fund (IMF)
9/1/2000
Click here to access - website
 
 
 
Herd Behavior in Financial Markets: A Review
Sushil Bikhchandani
Sunil Sharma
IMF Working Paper WP/00/48
International Monetary Fund (IMF)
2/1/2000
Click here to access - 1,296 KB PDF
 
 
 
Informational Speculative Attacks: Good News is No News
Robert Rigobon, MIT
Click here to access - Coming Soon
 
 
 
International Investors, Contagion and the Russian Crisis
Alexei Medvedev
Bofit Discussion Papers No. 6
Bank of Finland. Institute for Economies in Transition
1/1/2001
Click here to access - 698 KB PDF
 
 
 
Managerial Incentives and Financial Contagion
Sujit Chakravorti - Federal Reserve Bank of Chicago
Subir Lall - International Monetary Fund
5/28/2004
Click here to access - 258 KB PDF
 
 
 
Measuring the Contagion in the East Asian Currency Crisis
Mardi Dungey
Vance L. Martin
International Monetary Fund Seminar Series (Internationa); No. 2001-11
10/1/2000
Click here to access - Coming Soon
 
 
 
Model of Crises in Emerging Markets, A
Michael P. Dooley
NBER Working Paper No. W6300
National Bureau of Economic Research
12/1/1997
Click here to access - 1,191 KB PDF
 
 
 
Multiple Equilibria, Contagion, and the Emerging Market Crises
Paul R. Masson
IMF Working Paper WP/99/164
International Monetary Fund (IMF)
12/21/1999
Click here to access - 2,914 KB PDF
 
 
 
Overreaction of Asset Prices in General Equilibrium
S. Rao Aiyagari
Mark Gertler
NBER Working Paper No. W6747
National Bureau of Economic Research
10/1/1998
Click here to access - 1,493 KB PDF
 
 
 
Portfolio Diversification, Leverage, and Financial Contagion
Garry Schinasi
R. Todd Smith
IMF Staff Papers 47, NO. 2
International Monetary Fund (IMF)
5/1/2000
Click here to access - Coming Soon
 
 
 
Portfolio Diversification, Leverage, and Financial Contagion
Gary Schinasi - Division Chief, International Monetary Fund
Todd Smith, Professor, University of Alberta
9/1/1999
Click here to access - 152 KB PDF
 
 
 
Primer on Financial Contagion, A
Marcello Pericoli
Massimo Sbracia, Bank of Italy
Temi Di Discussione; No. 407
Banca D'Italia
6/1/2001
Click here to access - 361 KB PDF
 
 
 
Pure Contagion and Investor's Shifting Risk Appetite: Analytical Issues and Empirical Evidence
Manmohan S. Kumar
Avinash Persaud
IMF Working Paper WP/01/134
International Monetary Fund (IMF)
9/1/2001
Click here to access - 1,282 KB PDF
 
 
 
Rational Contagion and the Globalization of Securities Markets
Guillermo A. Calvo, University of Maryland
Enrique G. Mendoza
Duke Economics Working Paper #97-26
5/17/1999
Click here to access - 532 KB PDF
 
 
 
Rational Contagion and the Globalization of Securities Markets
Guillermo Calvo
Enrique G. Mendoza
Journal of Economics; V. 51, No. 1
6/1/2000
Click here to access - Coming Soon
 
 
 
Rational Expectations Model of Financial Contagion, A
L. Kodres
M. Pritsker, The Federal Reserve Board
Finance and Economics Discussion Series
8/28/2000
Click here to access - 477 KB PDF
 
 
 
What Causes Currency Crises: Sunspots, Contagion or Fundamentals?
Marcel Fratzscher
EUI Working Papers; No. 99/39
European University Institute, Department of Economics
12/1/1999
Click here to access - 270 KB PDF
 
 
 
What Happens When You Regulate Risk? Evidence From A Simple Equilibrium Model
Jean-Pierre Zigrand
Jon Danielsson
London School of Economics
Click here to access - 318 KB PDF
 
 
 


This page last updated on 02/24/2003
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