Commonalities Between the ‘Bookends’ Financial Crises of Mexico 1994 and Greece 2007
- 532 Downloads
This chapter is a historical and theoretical investigation on the theme of ‘modern’ financial crises focused on contrasting the ‘bookends’ cases of Mexico 1994 and of Greece 2007 for improving the understanding of these two cases. The central idea of the chapter is based on the comparison of financial crises models: Orthodox, Heterodox (Minskyan) and a complex system framework, advocating heterodox models as the best explication for the case in point. Then, some guidelines for mitigating the impact of crises are proposed and thereafter some general conclusions are offered, both of them considering the selected cases on the basis of a pragmatic selection of parts of these explications including the historical perspective.
KeywordsMinsky Modern Financial Crises Exchange rateExchange Rate Bullish Position Economic Emergency
- Banco de México. (2016). Indicadores Económicos y Financieros. http://www.banxico.org
- Baldacci, E., de Mello, L., & Inchauste, G. (2002, June). Financial crises, poverty and income distribution. Finance & Development, 39(2), 1–6. International Monetary Fund.Google Scholar
- Caballero, R. J. (2006). On the macroeconomics of asset shortages. MIT and NBER, the 4th ECB Central Banking Conference on The Role of Money: Money and Monetary Policy in the Twenty-first Century, Frankfurt, November.Google Scholar
- Calvo, G. A., & Reinhart, C. (2000, November). Fear of Floating. NBER Working Paper No. 7993. Washington, DC: National Bureau of Economic Research.Google Scholar
- Dornbusch, R. (1999, June). A primer on emerging market crises. NBER Working Paper No. 8326. Washington, DC: National Bureau of Economic Research.Google Scholar
- Dornbusch, R. (2001, June). A primer on emerging market crises. NBER WP No. 8326, pp. 1–12. Retrieved from www.nber.org/chapters/e10649.PDF
- Edwards, S., & Sevastano, M. A. (1998). The morning after: The Mexican Peso in the aftermath of the 1994 currency crisis. NBER Working Paper No. 6516. Washington, DC: National Bureau of Economic Research.Google Scholar
- European Central Bank. (2016). Statistics. www.ecb.europa.eu.
- Felkerson, A. S. (2011). $29,000,000,000,000: A detailed look at the fed’s bailout by funding facility and recipient. Working Paper No. 698, Annandale-on-Hudson, NY: The Levy Economics Institute of Bard College.Google Scholar
- Hannsgen, G., & Papadimitriou, D. B. (2012). Fiscal traps and macro policy after the Euro Zone Crisis. Public Policy Brief No. 127. Annandale-on-Hudson, NY: The Levy Economics Institute of Bard College.Google Scholar
- International Monetary Fund. (2012, October). World economic and financial surveys, restoring confidence and progressing on reforms. www.imf.org.
- International Monetary Fund. (2013, February 20). Transcript of a press briefing, by William Murray. Deputy Spokesman, External Relations Department, International Monetary Fund. www.imf.org.
- International Monetary Fund. (2016). IMF Data & Statistics. www.imf.org/external//data.htm.
- McKinnon, R., & Pill, H. (1996). Credible liberalizations and international capital flows: The ‘overborrowing syndrome’. NBER Chapters in Financial Deregulation and Integration in East Asia NBER-EASE, 5, 7–50.Google Scholar
- Minsky, H. P. (1982). Can ‘it’ happen again? Essays on instability and finance. Armonk: Sharpe.Google Scholar
- Obstfeld, M. (1994). The logic of currency crises. Banque de France, Cahiers Economiques et Monetaires, 43, 189–213.Google Scholar
- Tornell, A., Westermann, F., & Martínez, L. (2004). The positive link between financial liberalization, growth, and crises. NBER Working Paper No. 10293. Washington, DC: National Bureau of Economic Research.Google Scholar