Despite the large output declines suffered by emerging Europe in 2008-09, a major currency and banking crisis was avoided. This paper argues that European economic and political integration was a mitigating factor in this. Cross-border banking groups, in particular, seem to have forestalled a sharp reversal in capital flows. Cross-country variations in output decline can be explained by a small set of macroeconomic vulnerabilities.
CITATION STYLE
Berglöf, E., Korniyenko, Y., Zettelmeyer, J., & Plekhanov, A. (2011). Understanding the Crisis in Emerging Europe. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.1536645
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