What triggers market jitters? A chronicle of the Asian crisis

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What triggers market jitters? A chronicle of the Asian crisis, Volume 1

Author:	Kaminsky, Graciela L.; Schmukler, Sergio L.;	Collection Title:	Policy, Research working paper ; no. WPS 2094
Country:	East Asia and Pacific;	Date Stored:	1999/06/03
Document Date:	1999/04/30	Document Type:	Policy Research Working Paper
Language:	English	Major Sector:	Finance
Region:	East Asia and Pacific	Report Number:	WPS2094
Sub Sectors:	Other Finance	SubTopics:	Environmental Economics & Policies; Economic Theory & Research; Payment Systems & Infrastructure; Markets and Market Access; Access to Markets; Financial Intermediation
Volume No:	1

Summary: In the chaotic financial environment of East Asia in 1997-98, daily changes in stock prices of as much as 10 percent became commonplace. The authors analyze what type of news moved the market in those days of extreme market jitters. They find that movements are triggered by both local and neighbor-country news. News about agreements with international organizations and credit rating agencies have the most weight. Some of those large changes in stock prices, however, cannot be explained by any apparent substantial news but seem to be driven by herd instincts in the market itself. On average, the one-day market rallies are sustained with the largest one-day losses are recovered - suggesting that investors overreact to bad news.


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	PDF 44 pages	Official version*	3.08 (approx.)
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	PDF 40 pages	WPS2094	0.43

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