Abstract:
The idea that financial crisis can be transmitted to other countries is relatively a new concept for economists. Although Great Depression certainly had contagious elements, this concept is taken seriously only recently with the Mexican Crisis of 1994. This crisis is followed by East Asia Crisis, and Russian Crisis which are to some degree contagious. However none of these crises was as wide spread as the 2008 crisis. Another prominent feature of the 2008 crisis is that it began in a highly developed country. It spread across countries through financial and other economic links very quickly. These facts point out that for understanding the last global crisis not only identifying the channels through which the crisis is transmitted to but also the dynamics the dispersal are important. In this study it is our aim to model the dynamics or transmission. In that regard we adopt a widely used mathematical model of epidemics.
