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The Implications Of Liquidity Crises In The Context Of Emerging Capital Market

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  • Felicia Ramona Birău

    (University of Craiova Faculty of Economics and Business Administration Craiova, Romania)

Abstract

This article aims to highlight the implications of liquidity crises in the context of emerging capital market. Capital markets, and especially emerging capital market appear to behave notably differently during periods of liquidity crises in comparison with periods of stability. The concept of emerging capital market itself is in obvious antithesis to the idea of financial equilibrium. This particular category of capital markets is characterized in a certain measure by profound institutional, structural and functional disequilibrium. In addition, this article aims to analyze the efficient market hypothesis in terms of liquidity. It has been empirically demonstrated that emerging capital market are rarely efficient, or in the most optimistic case weak form efficient.

Suggested Citation

  • Felicia Ramona Birău, 2012. "The Implications Of Liquidity Crises In The Context Of Emerging Capital Market," Revista Tinerilor Economisti (The Young Economists Journal), University of Craiova, Faculty of Economics and Business Administration, vol. 1(18), pages 189-193, April.
    • Handle: RePEc:aio:rteyej:v:1:y:20121:i:18:p:189-193
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    References listed on IDEAS

    as
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    6. repec:pri:cepsud:91malkiel is not listed on IDEAS
    7. Goodhart, C., 2008. "Liquidity risk management," Financial Stability Review, Banque de France, issue 11, pages 39-44, February.
    8. Houthakker, Hendrik S. & Williamson, Peter J., 1996. "The Economics of Financial Markets," OUP Catalogue, Oxford University Press, number 9780195044072.
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    10. Burton G. Malkiel, 2003. "The Efficient Market Hypothesis and Its Critics," Journal of Economic Perspectives, American Economic Association, vol. 17(1), pages 59-82, Winter.
    11. Barry Eichengreen & Ashoka Mody, 1998. "What Explains Changing Spreads on Emerging-Market Debt: Fundamentals or Market Sentiment?," NBER Working Papers 6408, National Bureau of Economic Research, Inc.
    12. Burton G. Malkiel, 2003. "The Efficient Market Hypothesis and Its Critics," Working Papers 111, Princeton University, Department of Economics, Center for Economic Policy Studies..
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    liquidity; crises; disequilibrium; emerging capital market; efficiency; investors; risk;
    All these keywords.

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G17 - Financial Economics - - General Financial Markets - - - Financial Forecasting and Simulation

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