Contagion: Monsoonal Effects, Spillovers, and Jumps between Multiple Equilibria

Masson, Paul R.

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Contagion: Monsoonal Effects, Spillovers, and Jumps between Multiple Equilibria

IMF Working Paper No. 98/142

32 Pages Posted: 15 Feb 2006

See all articles by Paul R. Masson

Paul R. Masson

International Monetary Fund (IMF) - Research Department; The Brookings Institution

Date Written: September 1998

Abstract

Several concepts of contagion are distinguished. It is argued that only models that admit of multiple equilibria are capable of producing true contagion. A simple balance of payments model is presented to illustrate that phenomenon, and some back-of-the-envelope calculations assess its relevance to the coincidence of emerging market crises in 1994-95 and in 1997.

Keywords: contagion, spillovers, multiple equilibria

JEL Classification: F3, F4

Suggested Citation: Suggested Citation

Masson, Paul R., Contagion: Monsoonal Effects, Spillovers, and Jumps between Multiple Equilibria (September 1998). IMF Working Paper No. 98/142, Available at SSRN: https://ssrn.com/abstract=882708