01605cas a2200241 a 4500 AALejournalIMF010612 230101c9999 xx r poo 0 0eng d 15.00 USD 9781451974164 1020-7635 BD-DhAAL BD-DhAAL International Monetary Fund. Research Dept. IMF Staff papers, Volume 45 No. 2. Washington, D.C. : International Monetary Fund, 1998. 1 online resource (204 pages) IMF Staff Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students This paper analyzes contagion and volatility with imperfect credit markets. The paper interprets contagion effects as an increase in the volatility of shocks impinging on the economy. The implications of this approach are analyzed in a model in which domestic banks borrow at a premium on world capital markets, and domestic producers borrow at a premium from domestic banks. Financial spreads depend on a markup that compensates lenders, in particular, for the expected cost of contract enforcement. Higher volatility increases financial spreads and the producers' cost of capital. Mode of access: Internet IMF Staff Papers; IMF Staff Papers ; No. 1998/003 Full text available on IMF http://elibrary.imf.org/view/journals/024/1998/003/024.1998.issue-003-en.xml IMF e-Library