{
  "title": "Current Account Reversals and Currency Crises: Empirical Regularities",
  "publication": "IMF Working Papers, June 1, 1998",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/30/current-account-reversals-and-currency-crises-empirical-regularities-2647",
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  "summary": "This paper studies large reductions in current account deficits and exchange rate depreciations in low- and middle-income countries. It examines which factors help predict the occurrence of a reversal or a currency crisis, and how these events affect macroeconomic performance.",
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    {
      "heading": "Overview",
      "content": "- Authors: Gian M Milesi-Ferretti, Assaf Razin\n- Publication date: June 1, 1998\n- Type: IMF Working Paper (Working Paper No. 1998/089)\n- Scope: Studies large reductions in current account deficits and exchange rate depreciations in low- and middle-income countries, examining predictors of reversals and currency crises and their effects on macroeconomic performance."
    },
    {
      "heading": "Key findings",
      "content": "- Both domestic and external factors are found to trigger reversals and currency crises.\n  - Domestic factor explicitly identified: low reserves.\n  - External factor explicitly identified: unfavorable terms of trade.\n- The two types of events are distinct in their macroeconomic outcomes:\n  - An exchange rate crash is associated with a fall in output growth and a recovery thereafter.\n  - For current account reversals there is no systematic evidence of a growth slowdown."
    },
    {
      "heading": "Predictive factors examined",
      "content": "- Domestic factors:\n  - Low reserves\n- External factors:\n  - Unfavorable terms of trade"
    },
    {
      "heading": "Macroeconomic effects and dynamics",
      "content": "- Exchange rate crash:\n  - Associated sequence: fall in output growth followed by a recovery.\n- Current account reversal:\n  - No systematic evidence of a growth slowdown associated with the reversal.\n\n---\n\n Content in this bundle\n\n- Current Account Reversal and Currency Crises: Empirical Regularities - WP/98/89\n  - Current Account Reversal and Currency Crises: Empirical Regularities - WP/98/89 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Current Account Reversal and Currency Crises: Empirical Regularities - WP/98/89 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/30/current-account-reversals-and-currency-crises-empirical-regularities-2647"
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    "Authors: Gian M Milesi-Ferretti, Assaf Razin",
    "Published: June 1, 1998",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781451952421.001",
    "Authors: Gian M Milesi-Ferretti, Assaf Razin",
    "Publication date: June 1, 1998",
    "Type: IMF Working Paper (Working Paper No. 1998/089)",
    "Scope: Studies large reductions in current account deficits and exchange rate depreciations in low- and middle-income countries, examining predictors of reversals and currency crises and their effects on macroeconomic performance.",
    "Both domestic and external factors are found to trigger reversals and currency crises.",
    "The two types of events are distinct in their macroeconomic outcomes:",
    "Domestic factors:",
    "External factors:",
    "Exchange rate crash:",
    "Current account reversal:",
    "**Current Account Reversal and Currency Crises: Empirical Regularities - WP/98/89**"
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