The Duration of Capital Account Crises—An Empirical Analysis
November 1, 2007
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Summary
This paper examines the duration of capital account crises. We develop a new index to identify both the start and the end of these crises. Applying the index to a sample of 18 crisis episodes, we derive stylized facts on crisis duration and review the economic and financial circumstances that prevailed at the dusk of crises, a relatively unexplored area. We use the econometric technique of duration analysis to gauge the relative importance of various factors affecting the probability of exiting a crisis. We find that initial and external conditions are key determinants. But fiscal and monetary policies can also help shorten crisis duration.
Subject: Capital account crisis, Capital flows, Capital outflows, Exchange rates, Financial crises
Keywords: crisis duration, crisis episode, IMF financing, IMF staff calculation, WP
Pages:
42
Volume:
2007
DOI:
Issue:
258
Series:
Working Paper No. 2007/258
Stock No:
WPIEA2007258
ISBN:
9781451868210
ISSN:
1018-5941
