Vanishing Contagion?
Paolo Mauro,
Tatiana Didier () and
Sergio Schmukler
No 2006/001, IMF Policy Discussion Papers from International Monetary Fund
Abstract:
While a number of emerging market crises were characterized by widespread contagion during the 1990s, more recent crises (notably, in Argentina) have been mostly contained within national borders. This has led some observers to wonder whether contagion might have become a feature of the past, with markets now better discriminating between countries with good and bad fundamentals. This paper argues that a prudent working assumption is that contagion has not vanished permanently. Available data do not seem to point to a disappearance of the main channels that contribute to transmitting crises across countries. Moreover, anticipation of the Argentine crisis by international investors may help explain the recent absence of contagion.
Keywords: PDP; crisis; investor; mutual fund; market price; net; crises; international integration; international transmission of shocks; emerging market country; mutual fund holding; ERM crisis; crisis economy; crisis month; Mutual funds; Emerging and frontier financial markets; Hedge funds; Stock markets; East Asia; Eastern Europe (search for similar items in EconPapers)
Pages: 24
Date: 2006-01-01
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