An Endogenous Conclusion
This book investigated the relationship between the causes of financial crises and emerging markets and found two dominant dynamics: first, a high level of incoming financial flows generated in the financial centres of the world and, second, financial market liberalisation in the emerging economies. Thus, the thesis proposing that capital market liberalisation leads almost inevitably to financial crisis when a combination of sufficient push and pull factors are present is credible for the cases of Mexico, Brazil and Korea. The exact route diverged greatly between the three economies as a distinct combination of domestic policy was followed in the actual measures’ design, speed of implementation and sequencing of application. However, all three routes converged in the eventual crisis through a set of commonly experienced international liquidity supply-push and domestic liberalisation-pull factors.
KeywordsFinancial Market Public Debt Credit Default Swap Capital Flow Capital Control
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