Crises and Bail Outs of Banks and Countries: Linkages, Analogies, and Differences

Bonis, Riccardo De; Giustiniani, Alessandro; Gomel, Giorgio

doi:10.1111/1467-9701.00193

Cited by 19 publications

(20 citation statements)

References 30 publications

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“…There are various kinds of financial crises. In the literature of experimental economics, financial crises can generally be subdivided into extensive categories, including the independent debt crisis, the balance of payments (BoP) crisis, the currency crisis, the banking crisis, the foreign currency reserve crisis, the exchange rate crisis, the stock market crash (crisis), and the like (Bonis et al, 1999). It is worth noting that the present study deals with the financial crises faced by various countries rather than a global financial crisis (GFC).…”

Section: Literature Review Financial Crisismentioning

confidence: 99%

Investigating the Financial Crisis of the Iranian Stock Exchange Using Transfer Entropy Method and comparing it with the Dow Jones Financial Market

Mohaghegh¹,

Hamidiyan²,

Esfidvajani³

et al. 2021

PyR

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The focus of the present study is on the financial markets of Iran. In fact, the purpose of the present study is to examine the critical state of the Iranian stock market and compare it with one of the famous American markets called Dow Jones. The purpose of the financial crisis is to examine the effect of the interaction of companies within a market. According to modern financial theory, crisis is a phenomenon of market orientation and finding a negative preferred direction among companies. The stock market data of 180 companies of this market that were active during the period of 2008 to 2019 were used to investigate the financial crisis of the Iranian Stock Exchange. The results show that the average transfer entropy for 180 firms in the Iranian stock market is more random. That is to say, the observed declines do not correspond to the time periods of the crisis in the stock market. Although transfer entropy seems to be a good indicator for determining the period of crisis in the US Dow Jones market, it cannot be an indicator for determining the financial crisis for the Iranian stock market.

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Section: Literature Review Financial Crisismentioning

confidence: 99%

Investigating the Financial Crisis of the Iranian Stock Exchange Using Transfer Entropy Method and comparing it with the Dow Jones Financial Market

Mohaghegh¹,

Hamidiyan²,

Esfidvajani³

et al. 2021

PyR

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show abstract

“…[t]he simple definition of insolvency—negative net wealth—is hardly applicable to sovereign borrowers […] because, in almost all instances, the outstanding debt of a state is less than the assets owned by the government or by its nationals and that the government might seize by resorting to its coercive powers. (De Bonis et al, 1999: 70)…”

Section: Theory: the Bankruptcy Mythmentioning

confidence: 99%

“…Second, states can choose to avoid a strict interpretation of insolvency, according to which “the total stock of outstanding debt (domestic plus external debt) cannot exceed the present discounted value of current and future net incomes—i.e., the difference between tax revenues and government expenditures” (De Bonis, et al, 1999: 70). Based on this criterion, countries that fail to undertake policy reforms to generate higher income will become insolvent (De Bonis, et al, 1999: 70–71).…”

Section: Theory: the Bankruptcy Mythmentioning

confidence: 99%

Is US grand strategy self-defeating? Deep engagement, military spending and sovereign debt

Norrlof

Wohlforth

2016

Conflict Management and Peace Science

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Questions regarding the economic consequences of US grand strategy have gained new salience. This article provides an empirical test of the relationship between US military expenditures and public debt and clarifies the real constraints the US faces issuing debt. Neither results from the statistical analysis nor the economic theory of sovereign debt support the retrenchment position regarding the impact of military spending on public debt (1973–2015). Tax cuts are the most significant determinant of debt not military spending, social benefits or interest payments. Evaluating new hypotheses about alternative mechanisms through which military spending may damage the economy remains a priority.

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“…The term "financial crisis" is defined as "a wider range of disturbances, such as sharp declines in asset prices, failures of large financial intermediaries, or disruption in foreign exchange markets" (De Bonis et al, 1999). Allen and Snyder (2009) are synthetizing the characteristics of the crisis.…”

Section: Definitions and Common Patterns Of The Crisismentioning

confidence: 99%

Evolution of Financial Crises

Purica¹

2015

Nonlinear Dynamics of Financial Crises

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Crises and Bail Outs of Banks and Countries: Linkages, Analogies, and Differences

Cited by 19 publications

References 30 publications

Investigating the Financial Crisis of the Iranian Stock Exchange Using Transfer Entropy Method and comparing it with the Dow Jones Financial Market

Investigating the Financial Crisis of the Iranian Stock Exchange Using Transfer Entropy Method and comparing it with the Dow Jones Financial Market

Is US grand strategy self-defeating? Deep engagement, military spending and sovereign debt

Evolution of Financial Crises

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