Understanding Of Financial Crisis Research Articles

International policy coordination for financial market stability in the Asian economies

Based on the understanding of financial crisis as the self-fulfilling crisis of speculators belief system, this paper examines the feasibility of introducing the Tobin tax system to reduce financial volatility in the Asian foreign exchange markets. The model analysis in this paper provides the following policy implications. To reduce the motivation to deviate from the policy coordination, it is required to allow all tax revenues to collecting countries, especially to Singapore and Hong Kong. Even without the participation of the major western countries, the start of the tax policy coordination in the Asian region can have significant signalling effects to reduce speculative motivation.

If I were Minister of Finance…: gaining understanding of financial crisis through a simulation workshop

Financial crises (also known as debt crises, currency crises or balance of payments crises) have become endemic in the modern world. The countries at greatest risk have been developing countries. This article discusses a workshop, ‘If I were Minister of Finance...’, which we ran at the Association for Women in Development (AWID) conference in Guadalajara in October 2002. In the workshop, participants took part in a simulation of the Argentine currency crisis. The simulation sought to give participants a better understanding of the causes of a currency crisis, and the tough, limited choices a government faces in trying to prevent it. Simulations like the one described in this article can be helpful to activists and women's organisations in moving a gender-sensitive economic policy agenda forward.

The international policy coordination to reduce the financial volatility in north East Asia

This paper examines the feasibility of introducing the Tobin tax system to reduce financial volatility in international foreign exchange markets based on the understanding of financial crisis as a self‐fulfilling crisis of speculators’ belief system. Based on a model analysis, which assumes a speculator from a third country and two governments competing for capital inflows, this paper demonstrates that a country has a less incentive to deviate from the international policy coordination with respect to the Tobin tax system when the country shows less dependency on financial transaction business in its national income. In addition, when the country is more stable in its current account balance and foreign reserves, it is more likely that the country abides by the policy coordination. Therefore, it is required to offer such incentives as allowing all tax revenues to the collecting governments, when the participating countries are relatively more dependent on the financial transaction business as a source of national income.