A Nonlinear Dynamic Model of the Financial Crises Contagions
Ke Chen, Yirong Ying
DOI: 10.4236/iim.2011.31002   PDF    HTML     5,046 Downloads   9,098 Views   Citations


Employing the Differential Dynamics Method, a nonlinear dynamic model is set up to describe the international financial crises contagion within a short time between two countries. The two countries’ control force depending on the timely financial assistance, the positive attitude and actions to rescue other infected countries, and investor confidence aggregation, and the immunity ability of the infected country are considered as the major reasons to drive the nonlinear fluctuations of the stock return rates in both countries during the crisis. According to the Ordinary Differential Equations Qualitative Theory, we found that there are three cases of financial crises contagion within a brief time between two countries: weak contagion with instability but inhibition, contagion with limit and controllable oscillation, and strong contagion without control in a brief time.

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K. Chen and Y. Ying, "A Nonlinear Dynamic Model of the Financial Crises Contagions," Intelligent Information Management, Vol. 3 No. 1, 2011, pp. 17-21. doi: 10.4236/iim.2011.31002.

Conflicts of Interest

The authors declare no conflicts of interest.


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