Portfolio Diversification, Leverage, and Financial Contagion /

Models of 'contagion' rely on market imperfections to explain why adverse shocks in one asset market might be associated with asset sales in many unrelated markets. This paper demonstrates that contagion can be explained with basic portfolio theory without recourse to market imperfections....

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Bibliographic Details
Main Author: Smith, T.
Other Authors: Schinasi, Garry
Format: Journal
Language:English
Published: Washington, D.C. : International Monetary Fund, 1999.
Series:IMF Working Papers; Working Paper ; No. 1999/136
Online Access:Full text available on IMF