Currency and Banking Crises: The Early Warnings of Distress
George Washington University - Department of Economics; National Bureau of Economic Research (NBER)
IMF Working Paper No. 99/178
The abruptness and virulence of the 1997 Asian crises have led many to claim that these crises are of a new breed and were thus unforecastable. This paper examines 102 financial crises in 20 countries and concludes that the Asian crises are not of a new variety. Overall, the 1997 Asian crises, as well as previous crises elsewhere, occur when economies are in distress, making the degree of fragility of the economy a useful indicator of future crises. Based on this idea, the paper proposes different composite leading indicators of crises, evaluated in terms of accuracy both in-sample and out-of-sample.
Number of Pages in PDF File: 38
Keywords: Early Warnings, Currency Crises, Banking Crises
JEL Classification: F300, F410, F470working papers series
Date posted: February 14, 2006
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