Are Currency Crises Predictable?
IMF Working Paper No. 97/159
Posted: 10 Jun 1998
Date Written: December 1997
This paper studies whether exchange rate expectations and overvaluations are predictors of currency crises. The results suggest that overvaluation has predictive power in explaining crises. However, although expected depreciation obtained from survey data partially takes different exchange rate misalignment measures into consideration, expectations fail to anticipate currency crises.
JEL Classification: F31, F33
Suggested Citation: Suggested Citation