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Financial Market Contagion

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Abstract

The power of the metaphor of contagion – that beliefs, actions, and strategies spread among economic agents like pathogens among biological organisms – causes it to recur in disparate areas of economics. This article focuses on four applications of contagion to economics: social influence or memoryless learning; Bayesian social learning; strategy choice in coordination games; and the spread of crises in international financial markets.

This chapter was originally published in The New Palgrave Dictionary of Economics, 2nd edition, 2008. Edited by Steven N. Durlauf and Lawrence E. Blume

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  1. http://link.springer.com/referencework/10.1057/978-1-349-95121-5

    Morgan Kelly

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    Kelly, M. (2008). Financial Market Contagion. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95121-5_1959-1

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    • DOI: https://doi.org/10.1057/978-1-349-95121-5_1959-1

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    • Publisher Name: Palgrave Macmillan, London

    • Online ISBN: 978-1-349-95121-5

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