Structural Vulnerabilities and Currency Crises

Author/Editor:

Swart R. Ghosh ; Atish R. Ghosh

Publication Date:

January 1, 2002

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

This paper examines the role of structural factors—governance and rule of law, corporate sector governance (creditor rights and shareholder rights), corporate financing structure—as well as macroeconomic variables in currency crises. Using a technique known as a binary recursive tree allows for interactions between the various explanatory variables. It is found that structural vulnerabilities play an important role in the occurrence of “deep” currency crises (those with a real GDP growth decline of at least 3 percentage points) and that there are complex interactions between these structural vulnerabilities and macroeconomic imbalances.

Series:

Working Paper No. 02/9

Subject:

Corporate governance Currencies Currency crises Financial crisis Foreign exchange

English

Publication Date:

January 1, 2002

ISBN/ISSN:

9781451842609/1018-5941

Stock No:

WPIEA0092002

Format:

Paper

Pages:

31

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