Currency and Banking Crises: The Early Warnings of Distress

41 Pages Posted: 26 Dec 1998

See all articles by Graciela Kaminsky

Graciela Kaminsky

National Bureau of Economic Research (NBER); George Washington University - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: October 1998

Abstract

The abruptness and virulence of the 1997 Asian crises have led many to claim that these crises are of a new breed and thus they were 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 in other regions, occur when the 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, which are evaluated in terms of accuracy both in-sample and out-of-sample.

JEL Classification: F3, F34, F30

Suggested Citation

Kaminsky, Graciela, Currency and Banking Crises: The Early Warnings of Distress (October 1998). FRB International Finance Discussion Paper No. 629. Available at SSRN: https://ssrn.com/abstract=141589 or http://dx.doi.org/10.2139/ssrn.141589

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