The Balance Sheet Approach to Financial Crises in Emerging Markets
Levy Economics Institute Working Paper No. 485
54 Pages Posted: 14 Dec 2006
Date Written: December 2006
Abstract
This paper contrasts the conventional balance sheet approach to the analysis of economic disturbances in emerging markets with the alternative balance sheet approach that applies and extends Minsky's Financial Instability Hypothesis to (open) emerging market economies. Earlier balance sheet studies are found to be flawed because of a failure to disaggregate firms' balance sheets. Examination of such balance sheets in Thailand, Malaysia, Indonesia, Singapore, and Hong Kong suggests that firms in the three crisis countries did share common causes of financial fragility, but that the level of financial development and the particular domestic economic and political situation also affected their situation.
Keywords: Emerging Markets, Minsky, Financial Crises, Southeast Asia
JEL Classification: O16, O12, F34
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
Globalization and Capital Markets
By Maurice Obstfeld and Alan M. Taylor
-
The Gold Standard as a `Good Housekeeping Seal of Approval'
By Michael D. Bordo and Hugh Rockoff
-
Crises Now and then: What Lessons from the Last Era of Financial Globalization
-
The Great Depression as a Watershed: International Capital Mobility Over the Long Run
By Maurice Obstfeld and Alan M. Taylor
-
Currency Mismatches, Debt Intolerance and Original Sin: Why They are Not the Same and Why it Matters
By Barry Eichengreen, Ricardo Hausmann, ...
-
Emerging Market Spreads: Then Versus Now
By Yishay Yafeh, Nathan Sussman, ...
-
Emerging Market Spreads: Then Versus Now
By Paolo Mauro, Nathan Sussman, ...
-
Emerging Market Spreads: Then Versus Now
By Paolo Mauro, Nathan Sussman, ...
-
By Michael D. Bordo and Finn Kydland
-
Sovereign Risk, Credibility and the Gold Standard: 1870-1913 Versus 1925-31
By Maurice Obstfeld and Alan M. Taylor