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Financial Crises and Contagion: An Approach in Panel Data

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Financial crises and contagion: An approach in panel data.

(the case of the emergent countries)

Abstract: The financial crises which shook the emergent countries, are one of the most significant demonstrations of contemporary financial instability. Indeed, the financial systems of the majority of the emergent countries knew serious dysfunctions during two last decades. The significant ones advanced in the comprehension of these crises were carried out thanks to very documented empirical work, who vainly tried to draw up a single list relating to the factors explaining the release of these crises. However, these approaches have theoretical bases relating to the models of first and of second generation of financial crises and could not give a satisfactory explanation concerning the recent financial crises.

The objective of this paper is, by prolonging this recent work, to improve the explanatory capacity of these approaches and to give more satisfactory bases to these financial crises. Its central assumption is that the deterioration of fundamental economic is a condition necessary but nonsatisfactory for the release of the financial crises.

An empirical analysis is proposed, based on stylized facts and econometric tests concerning fifteen emergent countries over the period 1980-1998 by the technique of the data of panel for random purpose.

The results obtained do not reject the assumption according to which the weakness of fundamental economic will be at the origin of release of the financial crises and the planetary propagation of the jolts is due to the real and financial contagion.

One shows the fact that no country is with the safe haven of the events being held inthe rest of the world in the presence of the contagion, and in order to reduce fallen down of these financial crises one proposes the need for a better management of the economic policy and the introduction of the strict standards of supervision on a planetary level.

Key words: financial crises, contagion, emergent countries, panel data.

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