A FUZZY CHARACTERIZATION OF UNCERTAINTY IN FINANCIAL CRISES

Jorge Pazzi and Fernando Tohmé
Additional contact information
Jorge Pazzi: University Nacional del Sur

Fuzzy Economic Review, 2005, vol. X, issue 2, 61-70

Abstract: The so-called first and second gene-ration models focus on fundamentals as the main cause of a crisis. During the 1990s many developing economies underwent structural reforms, which lead to an improvement of those fundamentals. Hence, at that time, the stability of the domestic financial systems seemed basically guaranteed. However, this confidence was shattered by the outbreak of the financial crises of the second half of the decade. Some of them were certainly due to weak fundamentals in the affected economies. But other crises seemed to be engendered just because of wrong or misleading perceptions on the part of economic agents. The paper argues that a main source for these misperceptions is the way in which agents hedge their funds, on the basis of their assessment of the inner workings of the financial system. To support this claim, a simple model with a fuzzy measure of the risk of assets is introduced

Keywords: Financial crises; fuzzy measures of uncertainty; hedging; dollarization; systemic risk. (search for similar items in EconPapers)
JEL-codes: G17 (search for similar items in EconPapers)
Date: 2005
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fzy:fuzeco:v:x:y:2005:i:2:p:61-70

Access Statistics for this article

More articles in Fuzzy Economic Review from International Association for Fuzzy-set Management and Economy (SIGEF) Contact information at EDIRC.
Bibliographic data for series maintained by Aurelio Fernandez ( this e-mail address is bad, please contact ).