are much more likely for these economies. Moreover, policy distortions in these countries work to magnify the effects of adverse shocks. Given the limited access of emerging markets to world capital markets, illiquidity resulting from contemporaneous loss of domestic and foreign investor confidence is nearly sufficient to cause a financial and currency crises, the 1997 Asian financial crisis being one example. See also Credit crunch Financial accelerator Insolvency Financial crisis of 2007–2008 Subprime mortgage crisis Liquidity preference Money supply References Further reading Financial crises Credit Economic crises United States housing bubble