This setting lets you change the way you view articles. You can choose to have articles open in a dialog window, a new tab, or directly in the same window.
Open in Dialog
Open in New Tab
Open in same window

American Economic Review: Vol. 96 No. 5 (December 2006)

Expand

Quick Tools:

Print Article Summary
Export Citation
Sign up for Email Alerts Follow us on Twitter

Explore:

AER - All Issues

AER Forthcoming Articles

Globalization and Emerging Markets: With or Without Crash?

Article Citation

Martin, Philippe, and Hélène Rey. 2006. "Globalization and Emerging Markets: With or Without Crash?" American Economic Review, 96(5): 1631-1651.

DOI: 10.1257/aer.96.5.1631

Abstract

We analyze the effects of financial and trade globalization on the likelihood of financial crashes in emerging markets. While trade globalization always makes crashes less likely, financial globalization may make them more likely, especially when trade costs are high. Pessimistic expectations can be self-fulfilling and lead to a collapse in demand for goods and assets. Such a crash comes with a current account reversal and drops in income and investment. Lower-income countries are more prone to such demand-based financial crises. A quantitative evaluation shows our model is consistent with the main stylized facts of financial crashes in emerging markets. (JEL F12, F32, F37, F41, O16)

Article Full-Text Access

Full-text Article

Additional Materials

Download Data Set (4.22 KB)

Authors

Martin, Philippe
Rey, Hélène


American Economic Review


Quick Tools:

Sign up for Email Alerts

Follow us on Twitter

Subscription Information
(Institutional Administrator Access)

Explore:

AER - All Issues

AER - Forthcoming Articles

Virtual Field Journals


AEA Member Login:


AEAweb | AEA Journals | Contact Us