Currency and Banking Crises: The Early Warnings of Distress
December 1, 1999
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Summary
The abruptness and virulence of the 1997 Asian crises have led many to claim that these crises are of a new breed and were thus unforecastable. This paper examines 102 financial crises in 20 countries and concludes that the Asian crises are not of a new variety. Overall, the 1997 Asian crises, as well as previous crises elsewhere, occur when economies are in distress, making the degree of fragility of the economy a useful indicator of future crises. Based on this idea, the paper proposes different composite leading indicators of crises, evaluated in terms of accuracy both in-sample and out-of-sample.
Subject: Banking, Banking crises, Currency crises, Cyclical indicators, Economic growth, Financial crises, Foreign exchange, Real exchange rates
Keywords: Asia and Pacific, Banking Crises, banking crisis, banking fragility, crisis time, currency crash, Currency Crises, currency crisis, currency-crisis months, Cyclical indicators, Early Warnings, forecasting currency, foreign exchange, Global, Real exchange rates, WP
Pages:
38
Volume:
1999
DOI:
Issue:
178
Series:
Working Paper No. 1999/178
Stock No:
WPIEA1781999
ISBN:
9781451858938
ISSN:
1018-5941
