International contagion through leveraged financial institutions
By: Eric van Wincoop
Contributors: National Bureau of Economic Research
Series: NBER working paper series -- working paper 17686; Working paper series (National Bureau of Economic Research : Online) -- working paper no. 17686.
Publisher: National Bureau of Economic Research
Published: 2011
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Description: "The 2008-2009 financial crises, while originating in the United States, witnessed a drop in asset prices and output that was at least as large in the rest of the world as in the United States.  A widely held view is that this was the result of global transmission through leveraged financial institutions.  We investigate this in the context of a simple two-country model.  The paper highlights what the various transmission mechanisms associated with balance sheet losses are, how they operate, what their magnitudes are and what the role is of different types of borrowing constraints faced by leveraged institutions.  For realistic parameters we find that the model cannot account for the global nature of the crisis, both in terms of the size of the impact and the extent of transmission"--National Bureau of Economic Research web site.
Notes: Title from PDF file as viewed on 2/21/2012.

Includes bibliographical references.

Also available in print.

System requirements: Adobe Acrobat Reader.

Mode of access: World Wide Web.