Research On The International Transmission Mechanism Of Financial Crisis In The Context Of Globalization

The global financial turmoil brought about by sub-prime mortgage crisis is an unexpected chaos. Looking back into history, we could only find part of the answers to the international transmission mechanism of this financial crisis, since some of the mechanisms concerning this financial crisis are very unique, which are closely connected to the trends happening in the global financial industry in recent years. The changing international transmission mechanism of financial crisis increases the instability of the world's financial system. Thus, in order to control the accumulation of the related financial risks and enhance the stability of the world's financial system, it becomes increasingly essential to complete the research in this area, which is also the subject of this thesis, the international transmission mechanism of financial crisis in the context of globalization.The financial crisis contagion theory contains many contents closely related to the international transmission mechanism of financial crisis. Besides, the theory of financial instability, the theory of currency crisis and the theory of financial globalization deal with this issue as well. In sum, the points of view expressed in these literatures could be divided into four international transmission channels of financial crisis, which are channel of international trade, channel of financial institution, channel of international capital flows and channel of anticipation respectively. These four transmission channels construct the basic analysis framework of this dissertation. However, owing to the globalization of financial institution, the increasingly complicated risk-sharing mechanism of financial derivatives, the integration trend of the financial industry and the changing behavior and structure of the investors in the global capital market, the international transmission mechanism of financial crisis changes along with these changing factors and come up with some new characteristics, which have not been analyzed systematically yet. Therefore, based on the summarization of the classic theories and the most significant financial crises in history, combined with the most recent tendencies of the world's financial sector in the context of globalization, this thesis is trying to complete and refine the research in this field. This dissertation mainly focuses on three issues. First, the literature review and history review of the international transmission mechanism of financial crisis. Second, the major channels of the international transmission mechanism of financial crisis, its new characteristics and the analysis of their causes. Third, the policy implications in the view of the international transmission mechanism. In each sector, based on the related theories, the thesis uses the most typical financial crises in three historical periods to do the comparative research, which includes the Great Depression during 1929-1933, the three currency crises during the 1990s and this global financial turmoil triggered by sub-prime crisis.There are three chapters in this thesis and Chapter2 is the most important chapter. In Chapter2, the analysis framework of this dissertation, i.e. the four main channels of the international transmission mechanism of financial crisis (international trade, financial institution, international capital flow and anticipation) is first brought up by the author, on the basis of the review of the history events and classic theories in Chapter1. Then, the new characteristics of the mechanism are being summarized and their causes are being carefully analyzed.