Financial Crisis and Credit Crunch As a Result of Inefficient Financial Intermediation - with Reference to the Asian Financial Crisis (Google eBook)

Front Cover
International Monetary Fund, Sep 1, 1998 - Business & Economics
0 Reviews
This paper develops a model of private debt financing under inefficient financial intermediation. It suggests a mechanism that can generate the following sequence of events observed in the recent Asian crisis: a period of relatively low capital flow despite a steady improvement in economic fundamentals (capital inflow inertia), followed by a fast buildup of capital inflow, and ended with a large capital outflow and domestic credit crunch. Unlike other models requiring large movements in fundamentals or asset prices to explain a financial crisis, this model can exhibit large credit/capital flow swings with moderate changes in the economic and market environment.
  

What people are saying - Write a review

We haven't found any reviews in the usual places.

Contents

III Comparative Statics and Policy Responses to a Financial Crisis
7
IV Concluding Remarks
11

Common terms and phrases

Bibliographic information