Pure Contagion and Investors Shifting Risk Appetite; Analytical Issues and Empirical Evidence
Manmohan S. Kumar
General, [Capital markets;Financial crisis;Foreign exchange;Risk aversion, contagion affects, financial crises, contagion, correlation, probability, currency crises, Financial Institutions and Services]
This paper discusses a "pure" form of financial contagion, unrelated to economic fundamentals - investors' shifting appetite for risk. It provides an analytical framework for identifying changes in investors' risk appetite and discusses whether it is possible to directl...