Ashford ECO 406: Week 5 – DQ 1 – Capital Flow and Currency Crises

Ashford ECO 406: Week 5 – DQ 1 – Capital Flow and Currency Crises

1st Posting Due by Day 3. Capital Flow and Currency Crises. One of the distinguishing features of currency crises and capital flight episodes that have occurred since the 1980’s is that they have often linked across countries. Do you believe a contagion effect of capital flow and currency crises can lead to greater volatility and deep stabilization in markets? In your answer, include one example where this has occurred. Respond to at least two of your classmates’ postings.






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Capital flow and currency crises

            The economy of the US is normally the reference point of all other economies. I strongly believe that the economy of the US sets the precedence and the volatility of the market. Capital flow in the US determines the currency crises. If for instance, the value of the US dollar falls maybe due to excess printing of money, the entire world would actually be affected. This is because, when for instance you study forex exchange…


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