Abstract
The crises initiated in Mexico in 1994, Thailand in 1997, and Russia in 1998 had strong spillover effects in their regions and around the world. As speculative attacks brought down long-standing pegs, the attacked countries were driven into some of the deepest recessions in modem times. Even countries that successfully defended their currencies were scarred by deep recessions due to the tight monetary conditions implemented to fight the attacks. These crises were not confined to national borders, nor were they confined to specific regions. The Thai crisis engulfed, within days, Indonesia, Malaysia, and the Philippines. The Russian crisis spread to countries as far apart as Brazil and Pakistan. Even developed countries were affected, with the Russian default and devaluation reverberating through financial markets in Germany, Great Britain, and the United States.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
References
Bank for International Settlements (1998). 68th Annual Report, Basle, Switzerland.
Borensztein, Eduardo and R. Gaston Gelos (1999). “A Panic-Prone Pack? The Behavior of Emerging Market Mutual Funds.” International Monetary Fund mimeo.
Bowe, Michal and Daniel Domuta (1999). “Foreign Investor Behaviour and the Asian Financial Crisis.” University of Manchester mimeo.
Brown, Stephen, William Goetzmann, and James Park (1998) “Hedge Funds and the Asian Currency Crisis of 1997.” NBER Working Paper 6427.
Calvo, Guillermo (1998). “Capital Market Contagion and Recession: An Explanation of the Russian Virus.” University of Maryland mimeo.
Calvo, Guillermo, and Enrique Mendoza (2000). “Rational Herd Behavior and the Globalization of Securities Markets.” Journal of International Economics, 51 (1): 79–113.
Eichengreen, Barry, and Donald Mathieson (1998). “Hedge Funds and Financial Market Dynamics.” International Monetary Fund Occasional Paper No. 166.
Frankel, Jeffrey and Sergio Schmukler (1996). “Country Fund Discounts and the Mexican Crisis of December 1994: Did Local Residents Turn Pessimistic Before International Investors?” Open Economies Review, 7: 511–534.
Frankel, Jeffrey, and Sergio Schmukler (1998). “Crisis, Contagion, and Country Funds,” in Reuven Glick, ed., Managing Capital Flows and Exchange Rates. ( Cambridge, New York, and Melbourne: Cambridge University Press. )
Frankel, Jeffrey, and Sergio Schmukler (2000). “Country Funds and Asymmetric Information.” International Journal of Finance and Economics, 5: 177–195.
Froot, Kenneth, Paul O’Connell, and Mark Seasholes (2000). “The Portfolio Flows of International Investors, I.” Forthcoming Journal of Financial Economics.
Kaminsky, Graciela, Richard Lyons, and Sergio Schmukler (2000a). “Managers, Investors, and Crises: Mutual Fund Strategies in Emerging Markets.” World Bank Working Paper No. 2399 and NBER Working Paper No. 7855.
Kaminsky, Graciela, Richard Lyons, and Sergio Schmukler (2000b). “Liquidity, Fragility, and Risk: The Behavior of Mutual Funds during Crises.” Mimeo.
Kodres, Laura, and Matthew Pritsker (1999). “A Rational Expectations Model of Financial Contagion,” International Monetary Fund mimeo.
Levy Yeyati, Eduardo and Angel Ubide (1998). “Crises, Contagion, and the Closed-End Country Fund Puzzle.” IMF Working Paper No. 98 /143
Marcis, R., S. West, and V. Leonard-Chambers (1995). “Mutual Fund Shareholder Response to Market Disruptions.” Perspective, Investment Company Institute, 1(1).
Pan, Ming-Shiun, Kam Cham, and David Wright (2000). “Divergent Expectations and the Asian Financial Crisis of 1997.” Forthcoming Journal of Financial Research.
Rea, James (1996). “U.S. Emerging Market Funds: Hot Money or Stable Source of Investment Capital?” Perspective, Investment Company Institute, 2(6).
Van Rijckeghem, Caroline and Beatrice Weder (2000). “Financial Contagion: Spillovers through Banking Centers.” International Monetary Fund mimeo.
World Bank (1997). Private Capital Flows to Developing Countries, World Bank Policy Research Report.
Author information
Authors and Affiliations
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2001 Springer Science+Business Media New York
About this chapter
Cite this chapter
Kaminsky, G., Lyons, R., Schmukler, S. (2001). Mutual Fund Investment in Emerging Markets: An Overview . In: Claessens, S., Forbes, K.J. (eds) International Financial Contagion. Springer, Boston, MA. https://doi.org/10.1007/978-1-4757-3314-3_7
Download citation
DOI: https://doi.org/10.1007/978-1-4757-3314-3_7
Publisher Name: Springer, Boston, MA
Print ISBN: 978-1-4419-4876-2
Online ISBN: 978-1-4757-3314-3
eBook Packages: Springer Book Archive