EconPapers    
Economics at your fingertips  
 

Bank Runs in Open Economies and The International Transmission of Panics

Peter Garber and Vittorio U. Grilli

No 2764, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: In this paper, we extend the bank run literature to an open economy model. We show that a foreign banking system, by raising deposit rates in the presence of a domestic banking panic, may generate sufficient liquid resources to acquire assets sold by the domestic banking system at bargain prices. In this case, foreign depositors will benefit from the domestic panic. We also show that our simple model is able to generate the spreading of panics. Perhaps not surprisingly, the crucial element in determining the propagation of financial crises is the effect of interest rates on savings decisions.

Date: 1988-11
Note: ITI ME IFM
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Published as Journal of International Economics, Vol. 27, nos. 1/2 (1989): 165-176.

Downloads: (external link)
http://www.nber.org/papers/w2764.pdf (application/pdf)

Related works:
Journal Article: Bank runs in open economies and the international transmission of panics (1989) Downloads
Working Paper: BANK RUNS IN OPEN ECONOMIES AND THE INTERNATIONAL TRANSMISSION OF PANICS (1988)
Working Paper: BANK RUNS IN OPEN ECONOMIES AND THE INTERNATIONAL TRANSMISSION OF PANICS (1988)
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:nbr:nberwo:2764

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w2764

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().

 
Page updated 2020-07-01
Handle: RePEc:nbr:nberwo:2764