The East Asian Crisis in Kindleberger-Minsky’s Framework

Saqib, Omar Farooq

doi:10.1590/0101-31572001-1462

Cited by 3 publications

(1 citation statement)

References 7 publications

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“…The 1997 Asian Crisis was a period of severe economic instability that impacted several East Asian countries, including Indonesia, South Korea, Thailand, the Philippines, and Malaysia (Saqib 2001). Triggered by unsustainable financial practices, economic imbalances, and structural weaknesses, the crisis had a global impact, sparking fears of financial contagion.…”

Section: Financial Bubbles In the Context Of Economic Crisismentioning

confidence: 99%

Quantitative Modeling of Financial Contagion: Unraveling Market Dynamics and Bubble Detection Mechanisms

Nica,

Ionescu,

Delcea

et al. 2024

Risks

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This study explored the complex interplay and potential risk of financial contagion across major financial indices, focusing on the Bucharest Exchange Trading Investment Funds Index (BET-FI), along with global indices like the S&P 500, Nasdaq Composite (IXIC), and Dow Jones Industrial Average (DJIA). Our analysis covered an extensive period from 2012 to 2023, with a particular emphasis on Romania’s financial market. We employed Autoregressive Distributed Lag (ARDL) modeling to examine the interrelations among these indices, treating the BET-FI index as our primary variable. Our research also integrated Exponential Curve Fitting (EXCF) and Generalized Supremum Augmented Dickey–Fuller (GSADF) models to identify and scrutinize potential price bubbles in these indices. We analyzed moments of high volatility and deviations from typical market trends, influenced by diverse factors like government policies, presidential elections, tech sector performance, the COVID-19 pandemic, and geopolitical tensions, specifically the Russia–Ukraine conflict. The ARDL model revealed a stable long-term relationship among the variables, indicating their interconnectedness. Our study also highlights the significance of short-term market shifts leading to long-term equilibrium, as shown in the Error Correction Model (ECM). This suggests the existence of contagion effects, where small, short-term incidents can trigger long-term, domino-like impacts on the financial markets. Furthermore, our variance decomposition examined the evolving contributions of different factors over time, shedding light on their changing interactions and impact. The Cholesky factors demonstrated the interdependence between indices, essential for understanding financial contagion effects. Our research thus uncovered the nuanced dynamics of financial contagion, offering insights into market variations, the effectiveness of our models, and strategies for detecting financial bubbles. This study contributes valuable knowledge to the academic field and offers practical insights for investors in turbulent financial environments.

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Section: Financial Bubbles In the Context Of Economic Crisismentioning

confidence: 99%