Anticipating Balance of Payments Crises--The Role of Early Warning Systems : The Role of Early Warning Systems

Author/Editor:

Catherine A Pattillo ; Andrew Berg ; Gian M Milesi-Ferretti ; Eduardo Borensztein

Publication Date:

January 24, 2000

Electronic Access:

Link to Abstract

Summary:

Recent years have witnessed an increase in the frequency of currency and balance of payments crises in developing countries. More important, the crises have become more virulent, have caused widespread disruption to other developing countries, and have even had repercussions on advanced economies. To predict crises, their causes must be clearly understood. Two competing strands of theories are reviewed in this paper. The first focuses on the consequences of such policies as excessive credit growth in provoking depletion of foreign exchange reserves and making a devaluation enevitable. The second emphasizes the trade-offs between internal and external balance that the policymaker faces in defending a peg.

Series:

Occasional Paper No. 186

English

Publication Date:

January 24, 2000

ISBN/ISSN:

9781557758286/0251-6365

Stock No:

S186EA0000000

Format:

Paper

Pages:

39

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