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Trade Integration as a Mechanism of Financial Crisis Prevention

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  • Joan Ripoll-i-Alcón

Abstract

We have created an eclectic model that synthesizes the different versions of the third generation exchange rate crises models. This eclectic model takes current existing schemes beyond the traditional analyses—based on causes and consequences of external financial crises in emerging markets—and raises trade openness as an effective mechanism to prevent and avoid foreign debt crises and exchange rate crises. Our findings give theoretical support to empirical economic literature about this topic because, at the present time, most of the studies connecting international trade and financial crises are basically empirical. Copyright International Atlantic Economic Society 2010

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  • Joan Ripoll-i-Alcón, 2010. "Trade Integration as a Mechanism of Financial Crisis Prevention," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 16(2), pages 149-164, May.
    • Handle: RePEc:kap:iaecre:v:16:y:2010:i:2:p:149-164:10.1007/s11294-010-9257-0
    DOI: 10.1007/s11294-010-9257-0
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    Cited by:

    1. Carmen M. Reinhart & Kenneth S. Rogoff, 2009. "The Aftermath of Financial Crises," American Economic Review, American Economic Association, vol. 99(2), pages 466-472, May.
    2. Abdilahi Ali & Katsushi S. Imai, 2015. "Editor's choice Crises, Economic Integration and Growth Collapses in African Countries," Journal of African Economies, Centre for the Study of African Economies, vol. 24(4), pages 471-501.

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    More about this item

    Keywords

    Financial and exchange rate crisis; Pro-competitive effect; Balance-sheet effect; Trade integration; Trade openness; E00; F1; F10; F15; F30;
    All these keywords.

    JEL classification:

    • E00 - Macroeconomics and Monetary Economics - - General - - - General
    • F1 - International Economics - - Trade
    • F10 - International Economics - - Trade - - - General
    • F15 - International Economics - - Trade - - - Economic Integration
    • F30 - International Economics - - International Finance - - - General

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