A Model to Assess the Probabilities of Growth, Fiscal, and Financial Crises

Author/Editor:

Suman S Basu ; Marcos d Chamon ; Christopher W. Crowe

Publication Date:

December 14, 2017

Electronic Access:

Download PDF. Use the free Adobe Acrobat Reader to view this PDF file

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary:

This paper summarizes a suite of early warning models to assess the probabilities of growth, fiscal, and financial crises in advanced economies and emerging markets. We estimate separate signal-extraction models for each type of crisis and sample of countries, and we use our results to generate “histories of vulnerabilities” for countries, regions, and the world. For the global financial crisis, our models report that vulnerabilities in advanced economies were rooted in the bursting of leveraged bubbles, while vulnerabilities in emerging markets stemmed from lengthy booms in credit and asset prices combined with growing weaknesses in the corporate and external sectors.

Series:

Working Paper No. 17/282

Subject:

English

Publication Date:

December 14, 2017

ISBN/ISSN:

9781484333143/1018-5941

Stock No:

WPIEA2017282

Price:

$18.00 (Academic Rate:$18.00)

Format:

Paper

Pages:

42

Please address any questions about this title to publications@imf.org