No one any longer doubts that this is the most serious crisis that the world economy has faced since at least the 1930s. Nor is there any remaining doubt that this crisis affects virtually all areas, developed and developing, with large reserves or small. (The only exceptions are a handful of countries, like Nigeria, that are not integrated into the world financial market, export overwhelmingly...

2 Abstract This paper provides a framework for examining developing-country financial crisis. It is based upon Hyman Minsky's financial fragility thesis and applied to the case of Thailand 1984-1999. There is empirical evidence for the evolution of the Thai economy through the Minskian regimes (hedged through speculative to Ponzi) in the period prior to the onset of the 1997 Asian crisis. Evide...

Bank crises are usually the result of dramatic swings in the value of assets held by the banking system. When asset values fall relative to liabilities, banks net worth is eroded, resulting in crisis. Minsky (1977) argues that such asset devaluations are a normal feature of the business cycle in market economies. As confidence builds during the business cycle, more and more agents engage in spe...

The asymmetric volatility, temporary volatility, and permanent volatility of financial asset returns have attracted much interest in recent years. However, a consensus has not yet been reached on the causes of them for both the stocks and markets. This paper researched asymmetric volatility and short-run and long-run volatility through global financial crisis for eight Asian markets. EGARCH and...

In this paper the author attempts an analysis of the current financial/economic crisis that is wider ranging and more fundamental than he has been able to find. For this purpose he reviews some social science literature that views the current crisis as an episode in the secular decline of the United States and more generally of the Western Democracies. The timidity of current reforms, which is ...

The intensity of recent turbulence in financial markets has surprised nearly everyone. This paper searches out the root causes of the crisis, distinguishing them from scapegoating explanations that have been used in policy circles to divert attention from the underlying breakdown of incentives. Incentive conflicts explain how securitization went wrong, why credit ratings proved so inaccurate, a...

As one of the most important financial innovations in 1990s, Commercial MortgageBacked Securities (CMBS) have provided significant amounts of financing for commercial real estate. However, when the Asian and Russian financial crisis hit in 1998, the low rated CMBS market almost dried up and one of the dominant investors Criimi Mae went to Chapter 11 for protection. This study investigates the e...

We synthesize the financial crisis contagion literature through the gravity model from physics and test the hypothesis that the severity of contagion relates positively to trade and financial linkages but negatively to psychic distance between countries, when macroeconomic fundamentals and institutional factors are controlled. The psychic distance variable, a behavioral predictor constructed al...

Ross Levine* July 2010 Abstract: There was a systemic failure of financial regulation: Senior policymakers repeatedly enacted and implemented policies that destabilized the global financial system. They maintained these policies even as they learned of the consequences of their policies during the decade before the crisis. The crisis does not primarily reflect an absence of regulatory power, u...