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Article: Falling Dominoes: A Theory of Rare Events and Crisis Contagion

TitleFalling Dominoes: A Theory of Rare Events and Crisis Contagion
Authors
Issue Date2016
PublisherAmerican Economic Association. The Journal's web site is located at http://www.aeaweb.org/aej-macro/index.php
Citation
American Economic Journal: Macroeconomics, 2016, v. 8 n. 1, p. 228-255 How to Cite?
AbstractCrises, such as revolutions and currency attacks, rarely occur; but when they do they typically arrive in waves. The rarity of crises itself is an important contagion mechanism in a multiple-country dynamic global game model. When players are uncertain about the true model of the world, observing a rare success elsewhere can substantially change their expectations concerning the payoffs from attacking or defending the regime. Such dramatic revisions in beliefs, amplified by strategic complementarity in actions, may lead to a series of attacks in other countries. The crisis period can be long-lasting, but will eventually come to an end.
Persistent Identifierhttp://hdl.handle.net/10722/212045
ISSN
2015 Impact Factor: 2.567
2015 SCImago Journal Rankings: 6.017

 

DC FieldValueLanguage
dc.contributor.authorChen, H-
dc.contributor.authorSuen, WC-
dc.date.accessioned2015-07-21T02:20:50Z-
dc.date.available2015-07-21T02:20:50Z-
dc.date.issued2016-
dc.identifier.citationAmerican Economic Journal: Macroeconomics, 2016, v. 8 n. 1, p. 228-255-
dc.identifier.issn1945-7707-
dc.identifier.urihttp://hdl.handle.net/10722/212045-
dc.description.abstractCrises, such as revolutions and currency attacks, rarely occur; but when they do they typically arrive in waves. The rarity of crises itself is an important contagion mechanism in a multiple-country dynamic global game model. When players are uncertain about the true model of the world, observing a rare success elsewhere can substantially change their expectations concerning the payoffs from attacking or defending the regime. Such dramatic revisions in beliefs, amplified by strategic complementarity in actions, may lead to a series of attacks in other countries. The crisis period can be long-lasting, but will eventually come to an end.-
dc.languageeng-
dc.publisherAmerican Economic Association. The Journal's web site is located at http://www.aeaweb.org/aej-macro/index.php-
dc.relation.ispartofAmerican Economic Journal: Macroeconomics-
dc.rightsAmerican Economic Journal: Macroeconomics. Copyright © American Economic Association.-
dc.rightsCreative Commons: Attribution 3.0 Hong Kong License-
dc.titleFalling Dominoes: A Theory of Rare Events and Crisis Contagion-
dc.typeArticle-
dc.identifier.emailChen, H: hengchen@hku.hk-
dc.identifier.emailSuen, WC: hrneswc@hkucc.hku.hk-
dc.identifier.authorityChen, H=rp01315-
dc.identifier.authoritySuen, WC=rp00066-
dc.description.naturepostprint-
dc.identifier.doi10.1257/mic.20140147-
dc.identifier.hkuros245337-
dc.identifier.volume8-
dc.identifier.issue1-
dc.identifier.spage228-
dc.identifier.epage255-
dc.publisher.placeUnited States-

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