On The Contagious Mechanism Of Financial Crisis Through The Credit Chains

The financial crisis is not only the frequent phenomenon in the modern economic life, but also a hot issue for economist researches. The researches on the financial crisis, along the theoretical development from the early stage of "Fiscal deficit" and the "Self-fulfillment Caused by Rational Expectations" to the "Soft Budget Constraint", show the tendency of approaches from the macro-mechanism toward the micro-mechanism. Among these theories, the theories of "Credit Chains" and "Credit Cycle", as Ill as "Contagion in Balance Sheet", presented by Nobuhiro Kiyotaki and John Moore, explore a unique way. It sheds the light on the pictures of crises at the angles of the corporate performance, short-term liability and the value of assets, which the financial risks produce, spread around, and eventually burst out.The thesis is expected to display the process. By taking the credit chains as the channel of contagion, and contagion in balance sheet as the style of that, I endeavor to set up a basic framework of the mechanism of financial contagion through the credit chains. Moreover, I compare the two modes of contagion in balance sheet: the direct one on credit impact, or the indirect one on the fluctuation of collateral value. Then, I expand the research to the key problems in the framework, and hold that the main features of the former contagion mode consist of the soft budget constraint, the bargains on liquidity and unbalanced credit relationship. Finally, I get the hypothesis on the mechanism of financial contagion through the credit chains.On the foundation of that hypothesis, 1 investigate the structure of bank-corporate credit chains, under the circumstance of development mode in East...