Financial Contagion Mechanism Based On Spatial Attribute

In the process of economic and financial globalization, the financial crisis is increasing frequently and the financial markets have become unrest in the picture. Especially in the 20th century financial crisis shows the new characteristics. The frequency of financial crises is speeding up. The financial crisis is super periodically and advanced. Economic levels in contagionous countries have no signs of a crisis. The spread of the financial crisis and contagionous effects intensification are speeding and becoming global. Currency crisis and banking crisis are dual. And from the subprime crisis, we can know that with the opening of China's financial markets, China also cannot survive in a crisis. Therefore studying financial contagion mechanism is very necessary. Studying financial contagion mechanism can further research and develop the financial contagion theory. It will enrich the contents of financial contagion. And to promote the field of academic research and related research achievements in China's policy of application has theoretical and practical significance.Based on surveys the current literature at home and abroad, this research points out the insufficiency. Induct and summarize the three generations of financial crisis and the theoretical model of financial crisis of new features. A new perspective is defined to financial connotation. According to the new features and based on the basis of the analysis of the financial crisis, this research analyze the interaction of microcosmic and and the macro environment.This study finds that financial crisis have two-dimensional spread attributes. That is temporal attribute and spatial attribute. In spatial attribute because in today's financial markets and via advanced technology, geographical space between contacts cannot describe all financial space. Therefore this paper will build economic system space. According to the macro and micro research of financial contagion, this article use economic system to indicate the financial spatial attribute. Divided into three aspects to construct economic system are politics, economy, science, technology and culture. Choose some general international political corruption index which is comprehensive index to reflect the government policy on economic impact. Economic select per capita GDP, monetary policy and price stability, economic policy, government scale, economic structure and market, monetary freedom, capital and financial market, foreign trade law environment, freedom, producer price index and the percentage of government revenue. Science and technology culture select adult literacy rate elementary, secondary and higher education, education and comprehensive enrollment of GNP ratio of funds, funds for research of GNP ratio, engaged in the research and development of millions of workers and the patent application number. Based on comprehensive score index, this article build economic system and space of financial contagion. And we will get space of weight matrix.This article from three aspects of contagion period:contagion degree and contagion mechanism. Using extremum theory of financial contagion make sure contagion period. During period of contagion, according to the space of weight matrix, foreign pressure index of panel data is on the spatial correlation inspection and stationarity test. Then based on financial crisis originated countries as the center, application space weight matrix, with other countries to create spatial -temporal model. We will get the relationship of originated country and others. Through calculating space spillover effect of financial crises have contagion strength. In this paper, the mechanism of infection in markov switching model system is added weight matrix space research in considering spatial factor under the condition of the financial crisis, this paper will spread contion channel into economic entity and channels of financial institutions. High and low risk in different mechanism under the economic and financial departments and entities of the relationship between financial contagion channels.While the study of domestic contagion between currency crisis and banking crisis, this paper study from the angle of financial fragility to ananlyze financial contagion. According to the type of crisis, the financial fragility is into currency fragility and bank fragility. This paper combined with the application of EMP and BSF of financial crisis weight matrix space infected countries panel data on application of granger causality analysis and panel threshold of granger causality analysis. Thus get currency crisis and banking crisis spread of causality. Finally based on two of the financial crisis, cause contagion process is analyzed.