De Gregario, J. and R. Valdes (1999). Crisis Transmission: Evidence from the Debt, Tequila, and Asian Flu Crises , mimeo (October).  Home/Search   Document Not in Database   Summary   Related Articles

....reserves means not spending them. In any case reserve depletion is not a credible long run way of dealing with capital reversals. Indeed, since international reserve holdings have been found to be a theoretically and statistically significant determinant of creditworthiness (Bussiere and Mulder, 1999, Haque, 1996 and Disyatat, 2001) depleting them as a way of cushioning the effect of capital outflows on the exchange rate may make matters worse by inducing further capital outflows. If capital outflows reflect a perception within private capital markets that a country is illiquid, reducing ....

.... of subsidiarity suggests that a regional system of contingent credit lines should be established similar to the bilateral 5 For instance, in a recent study using a sample of 20 countries covering the periods of the 1982 Mexican debt crisis, the 1994 95 Tequila crisis and the 1997 98 Asian crisis, De Gregario and Valdes (1999) found contagion to be directly dependent on geographical horizon. Using a panel of annual data for 19 developing economies for the period 1977 93, Krueger et al. (1998) concluded that a currency crisis in a regional economy raises the probability of a speculative attack on the domestic currency by ....

De Gregario, J. and R. Valdes (1999). Crisis Transmission: Evidence from the Debt, Tequila, and Asian Flu Crises , mimeo (October).

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