Please use this identifier to cite or link to this item:

Title: A model of the interactions between asset prices bubble bursts and twin crises
Authors: Liang,J. G.;Mao,W. L.;Yeh,C. C.
Contributors: 政大經濟系
Keywords: Twin crises;Bursting bubble;Self-fulfilling prophecy
Date: 2012-03
Issue Date: 2013-09-16 17:29:31 (UTC+8)
Abstract: This study develops a model to analyze the Interactions between twin crises—the banking crisis and the currency crisis—and their coincidence with the asset prices bubble bursts. Results show that the origin of both crises comes from agents worrying about the upcoming asset prices bubble bursts when bad economic fundamentals are announced. There are multiple equilibria crises in both two systems. Twin crises are caused by deteriorated fundamentals and fundamental-driven self-fulfilling prophecy. Our model offers some policy implications. First, it is unable to prevent twin crises by suspending deposit convertibility, full deposit insurance and financial dollarization. Second, suspension of currency convertibility can prevent a currency crisis, but not a banking crisis. However, the effect of lender of last resort is ambiguous. Finally, strict risk supervision and minimum capital requirements each can curtail twin crises.
Relation: Journal of Information & Optimization Sciences, 33(2/3), 273-294
Data Type: article
DOI 連結:
Appears in Collections:[經濟學系] 期刊論文

Files in This Item:

File Description SizeFormat
273294.pdf36KbAdobe PDF689View/Open

All items in 學術集成 are protected by copyright, with all rights reserved.

社群 sharing