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We study how investor behaviour a¤ects the transmission of ...nancial crises. If investors exhibit decreasing relative risk aversion, then negative wealth shocks increase the risk premium required to hold risky assets. We integrate this into a second generation model of currency crises which allows for a competitiveness e¤ect and for contagion through changes in fundamentals. The investor behaviour can lead to the transmission of ...nancial crises even in the absence of the competitivenessdoi:10.2139/ssrn.1078468 fatcat:nsdk3xb6tvc7toy5bua6vit2n4