tFINANCIAL CRISES

Techniques And Assumptions Used By The Authors To Investigate The Importance Of Financial Weaknesses And Linkages In The Three Crises

Techniques And Assumptions Used By The Authors To Investigate The Importance Of Financial Weaknesses And Linkages In The Three Crises

Introduction

The main purpose of this paper is to make an analysis on the techniques which have been described by the authors for the purpose of investigating the importance of financial weaknesses and linkages in the three crises of Mexican, Asian and Russian. The paper also makes discussion on the conclusion that the common creditor is considered to be the most significant variable for the purpose of identifying the importance of financial weaknesses and linkages and providing an explanation about the regional focus of these crises. The importance of the financial linkages have been emerged after making control on the different roles of the domestic and external essentials, financial weaknesses and the trade spillovers in the above mentioned three countries.

Discussion

This paper is a discussion on the three main financial crises i.e. the Mexican crisis of 1994-95, the Russian Crisis of 1998, and the Asian crisis of 1997. These financial crises have totally rules over the emerging market economies in these days. These financial crises in the three countries have been a cause of the increase of financial complexities from an economy to another. The policy makers and the researchers have been surprised over the phenomenon of these crises and the factors which have become as a contributor of the spread of these crises (Calvo, 2000, p. 113).

A huge research of currency crises have been focused on the identification of the economic and financial variables. In summary, this literature presents the finding that macroeconomics and the financial fundamentals can be helpful for the purpose of explaining the incidence and transmission ...