abstract:while energy especially oil, crises and economic integration have been playing an important role indevelopment and growth in east west asia economies and their intertwining relations, only limitedquantitative research on their impact has been carried out and reported for improved debate andcredible policy use. this paper uses an econometric modeling innovation with features superior to...

We study optimal macroprudential policy in a model in which unconventional shocks, in the form of news about future fundamentals and regime changes in world interest rates, interact with collateral constraints in driving the dynamics of financial crises. These shocks strengthen incentives to borrow in good times (i.e. when “good news” about future fundamentals coincide with a low-world-interest...

We study optimal macroprudential policy in a model in which unconventional shocks, in the form of news about future fundamentals and regime changes in world interest rates, interact with collateral constraints in driving the dynamics of financial crises. These shocks strengthen incentives to borrow in good times (i.e. when “good news” about future fundamentals coincide with a low-world-interest...

It is well known that equity, currency, or banking crises generate substantial real costs for the country in which they occur. Authorities and financial market participants have often been concerned that these crises would spill over or spread, leading to financial system volatility or crises elsewhere in the world. The recent Mexican, Asian, and Russian crises are examples where shocks origina...

Financial crises are supposed to be rare events, yet they occur quite often. According to Reinhart and Rogoff (2009), investors suffer from “this time is different” syndrome, failing to see crises coming because they do not recognize similarities among the different pre-crisis bubbles. As a result, each crisis surprises investors. Economists typically model financial crises as responses to shoc...

THE RECENT FINANCIAL CRISES IN EAST Asia, Russia, and elsewhere, and the earlier crisis in Mexico, have heightened interest in the subject of short-term borrowing by developing countries and the benefits and risks associated with such debt.1 This chapter examines the growth and determinants of short-term debt from international banks, the behavior of such debt during economic shocks, and its as...

I describe two amplifications mechanisms that operate during liquidity crises and discuss the scope for central bank policies during crises as well as preventive policies in advance of crises. The first mechanism works through asset prices and balance sheets. A negative shock to the balance sheets of asset-holders causes them to liquidate assets, lowering prices, further deteriorating balance s...

Several empirical studies are concerned with measuring the effect of currency and current account crises on economic growth. Using different empirical models this paper serves two aspects. It provides an explicit assessment of country specific factors influencing the costs of crises in terms of economic growth and controls via a treatment type model for possible sample selection governing the o...