Monday, September 22, 2008


Broad Definition:

Contagion is the cross-country transmission of shocks or the general cross-country spillover effects.

Contagion can take place both during "good" times and "bad" times. Then, contagion does not need to be related to crises. However, contagion has been emphasized during crisis times.

-- "Contagion of Financial Crises," World Bank Group, last updated 9/15/2000

Restrictive Definition:

Contagion is the transmission of shocks to other countries or the cross-country correlation, beyond any fundamental link among the countries and beyond common shocks. This definition is usually referred as excess co-movement, commonly explained by herding behavior.

Very Restrictive Definition:

Contagion occurs when cross-country correlations increase during "crisis times" relative to correlations during "tranquil times."

-- Ditto.

Today's Rune: Disruption. Happy 100th birthday to Delbert France (1908-1965), my paternal grandfather, RIP. He would have been appalled at today's world, but not, I suspect, shocked by it.


Lana Gramlich said...

I mean no disrespect, but your grandpa's probably lucky not to have to see what the American dream has become...

Bubs said...


For some reason, now, I'm creeped out.

Sidney said...

Scary pic. Scary thoughts.

the walking man said...

There is a domino effect to the unknown.

What will happen to main street's landscape if this massive bailout happens?
Will pensions, future and present be affected?
Will the ruin of the Social Security system be completed?
Is this the way to bring jobs back to these shores?
What will the new economy look like? Anything near free market democracy?

When the weak run and it causes a panic among the strong there is reason for care and caution but not reason enough to jump out the 30th floor windows.

The unfortunate part is that no one will know until the dust settles what has happened.

Charles Gramlich said...

That definition of contagion doesn't seem to make a lot of sense to me.

Mark Krone said...

The contagion of confusion is spreading, too.
Like all good American’s, my knowledge of this election comes directly from the TV news programs, dwindling newspapers, and radio talk shows featuring hot heads versus blowhards…here’s my thinking so far…first of all, we should not talk about lipstick, not that Obama meant her when he talked…or that she or Wasilla is in the dark at least half the year on many foreign policy issues…meaning that Russia, at the end of her street is in the dark, too…but Hillary is right, we need to give our luke-warm support … she supports the Obama-Biden ticket not just because Biden takes Amtrak…late, he is frequently late…but because he is for the average…no offense to average people…working people. He is a working person’s person…as is Obama but not as long, not to say that Obama lacks experience working, no, there is m ore to governing than sitting in Wash… because we need judgment and good looks…and a prison record from Hanoi…Obama is good looking but so is Michael Palin and the other Palin, too…we cannot fixate on…mortgages or crumbling investment houses…because we are in two wars and everyone who is not dead is getting tired…but Bush…his face is on TV with the sound off…we can’t hear him anymore...we can’t place exactly when he got so old…there is a group of men in cowboy hats yelling “Drill baby, drill.” (Dentists?)…we have to move forward to the change we can believe in…but only if we realize that this is a campaign of complex issues that demand clear thinking.

Erik Donald France said...

Thank you all for the comments, they are much appreciated!

(Aside to Bubs/Sidney -- that whole Spanish painter crew around the time of the Napoleonic wars creeps me out -- probably because they were on to something about human nature, war, all of it.)

As for the polis and the American Dream, much more coming, no doubt. All interesting points, and thanks.