When some troubled emerging-market nations experience a currency crisis, it affects other healthy emerging-market nations by raising risk premia and reducing investor confidence in the whole region portfolios. As a result, healthy emerging-market nations also prone to have a currency crisis as well. This phenomenon is known as:

Question

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The phenomenon described in the question is known as contagion, which refers to the spreading of financial difficulties from one country to others, either through direct financial links or through investor sentiment and confidence. This is a common feature of emerging market crises, where the soundness of one country's economy is intertwined with those of its neighbors. Experiential learning and moral hazard are related concepts, but are not explicitly relevant to the scenario described. Emerging market dysfunction is a vague term that does not accurately capture the dynamics of contagion.

When Some Troubled Emerging-Market Nations Experience a Currency Crisis, It