International Capital Movements, Financial Volatility and Financial Instability
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NBER Working Paper No. 6390 (Also Reprint No. r2238)*
Issued in August 1999
NBER Program(s): EFG
ME
This lecture outlines an asymmetric information theory of financial instability which describes the fundamental forces which harm both the financial sector and economic activity. This asymmetric information framework is then used to demonstrate that although international capital movements and financial volatility can play a role in destabilizing the economy is frequently overstated.
*Published:
Schriften des Vereins fur Socialpolitik Gelleschaft fur Wirtscharges und Socialwissenschafter, pp. 11-40, 1998.
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