.20 Since The 1990s, Emerging Economies, Financial Contagion Mechanism

There have been more than ten major outbreaks of financial crisis in the emerging economies, among which the 1994-95 Mexican Peso Crisis and the 1997 Asian Financial Crisis are the severest cases with the largest numbers of countries affected, while emerging markets in Central and Eastern Europe (CEE) have been significantly impacted in the current global financial turmoil. This fact has called for special attention on the unique mechanism of transmission in those crises. This paper is thus motivated and has been aimed to carry out a systematic investigation of the most important financial crises taking place in emerging economies since 1999s, and, by revealing the common nature and their differences, to provide thinking materials for the understanding of issues such as financial liberalism, financial openness in emerging markets, etc.Based on previous theoretical and empirical studies in the field, the paper develops an analytical framework for the research of financial crisis contagion in emerging economies and explores the contagion mechanism of the severest financial crises taking place in emerging economies in recent decades. The paper is organized as follows. Chapter 1 is a literature review. Chapter 2 considers two theoretical models of financial crisis contagion. Chapter 3 briefly summarizes the facts and features of the financial crises to be studied. Chapter 4 analyzes and compares the contagion channel of different crises. Chapter 5 concludes. The main findings of this paper are that monsoonal effects, spillovers, and pure contagion are the three major channels of crisis contagion among emerging economies and that the concrete forms and relative significance in individual cases of financial crisis are remarkably varied, which again reflects the complex nature of financial crisis.