The minimal conditions for a financial crisis: a multiregional intertemporal CGE model of the Asian crisis
Date
2000
Authors
Adelman, I.
Yeldan, E.
Advisor
Instructor
Source Title
World Development
Print ISSN
0305-750X
Electronic ISSN
1873-5991
Publisher
Pergamon Press
Volume
28
Issue
6
Pages
1087 - 1100
Language
English
Type
Article
Journal Title
Journal ISSN
Volume Title
Abstract
The globalization of world capitalism constrains the ability of the developmental state to pursue an independent industrialization and foreign trade strategy. We use an intertemporal, multiregion CGE model, to study the fundamental reasons for a financial crisis. We find that we can create a realistic crisis in the Asia region when capital markets are open and there is an unexpected rise in the risk premium of the Asia region. When capital markets are closed and the state retains all its policy instruments, the Asia region not only avoids a crisis but increases its rate of growth. (C) 2000 Published by Elsevier Science Ltd. All rights reserved.
Course
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Book Title
Keywords
Capital market, Financial crisis, General equilibrium analysis, Modeling