
Jose Gonzalez (ed.)
et al.
Published online:
21 February 2013
Published in print:
15 July 2003
Online ISBN:
9780226302683
Print ISBN:
9780226302676
Contents
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6.1 Introduction 6.1 Introduction
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6.2 Trade Liberalization and Financial Crisis: A Conceptual Framework 6.2 Trade Liberalization and Financial Crisis: A Conceptual Framework
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6.3 Trade Liberalization and Financial Crisis: Chile and the United States 6.3 Trade Liberalization and Financial Crisis: Chile and the United States
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6.4 Explanations of the Financial Crises in Chile and the United States 6.4 Explanations of the Financial Crises in Chile and the United States
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6.4.1 Two Inflations Under Fixed Exchange Rates 6.4.1 Two Inflations Under Fixed Exchange Rates
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6.4.2 Moral Hazard and the Lending Booms 6.4.2 Moral Hazard and the Lending Booms
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6.5 The Control of Moral Hazard by Weak Central Banks 6.5 The Control of Moral Hazard by Weak Central Banks
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6.6 Second-Generation Reforms 6.6 Second-Generation Reforms
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6.7 Conclusion 6.7 Conclusion
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References References
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Chapter
6 Trade Liberalization and Financial Crisis: A Historical Comparison of Chile and the United States
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Pages
231–256
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Published:July 2003
Cite
OXFORD ACADEMIC STYLE
Brock, Philip L., 'Trade Liberalization and Financial Crisis: A Historical Comparison of Chile and the United States', in Jose Gonzalez, and others (eds), Latin American Macroeconomic Reforms: The Second Stage (Chicago, IL , 2003; online edn, Chicago Scholarship Online, 21 Feb. 2013), https://doi.org/10.7208/chicago/9780226302683.003.0008, accessed 24 Apr. 2025.
CHICAGO STYLE
Brock, Philip L.. "Trade Liberalization and Financial Crisis: A Historical Comparison of Chile and the United States." In Latin American Macroeconomic Reforms: The Second Stage. Edited by Jose Gonzalez, and others (eds). University of Chicago Press, 2003. Chicago Scholarship Online, 2013. https://doi.org/10.7208/chicago/9780226302683.003.0008.
Abstract
This chapter explores a potentially important link between trade liberalization and financial crisis that emphasizes the supply of liquidity by the financial system. It proposes that trade liberalization may create an especially fragile structure of long-term bank loans and short-term deposits that is conducive to a financial crisis. The analysis emphasizes the decisions played by central banks following trade liberalizations and leading up to financial crises. To explore empirically the connection between trade liberalization and financial crisis, the chapter examines the experience of the United States in the 1830s and Chile in the 1970s.
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