My thesis analyzes several important problems about financial crisis....[ Read more ]
My thesis analyzes several important problems about financial crisis.
The first essay extends Diamond-Dybvig's model of bank runs in order to analyze some special phenomena observed during financial crises. By introducing imperfect competition, negative shocks and feedback effect, this model can explain a range of phenomena observed in recent financial crises that existing bank run models fail to explain. In this framework, the relationship between financial liberalization and financial crises is discussed, and some policy measures to prevent crisis are suggested.
The second essay studies the effects of financial crises on foreign trade both theoretically and empirically. The major findings are that banking crises had a negative impact on imports but a positive impact on exports in the short term, whereas currency crises decreased imports and increased exports in the long term.
The third essay investigates the spreading of financial crises through trade and financial linkages. Using a comprehensive data set for the period 1983- 1998, I examine whether there were spillover and contagion effects through different channels. Empirical results indicate that there were significant spillover effects through trade linkages and contagion effects via financial channels.