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          Risk Factors in International Financial Crises: Early Lessons from the 2008-2009 Turmoil
          Working paper by Dullien, Sebastian/ HTW, 2010, 21 pages
          Categories: Macroeconomic Policy

          This paper analyses the global transmission of the recent economic and financial crisis as a function of macroeconomic factors such as per capita gross domestic product, current-account positions prior to the crisis, exchange-rate regimes, inflation prior to the crisis and financial openness. It finds that large current-account imbalances (both surpluses and deficits) were a risk factor in the current global economic turmoil. It also finds that countries that use currency boards have suffered much more from the crisis than countries with other exchange-rate regimes. Financial openness appears to have increased the risk of experiencing a deep recession, while higher inflation prior to the crisis seems to have mitigated its impact.