Are Currency Crises Predictable?

Author/Editor:

Rodrigo O. Valdes ; Ilan Goldfajn

Publication Date:

December 1, 1997

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 studies whether exchange rate expectations and overvaluations are predictors of currency crises. The results suggest that overvaluation has predictive power in explaining crises. However, although expected depreciation obtained from survey data partially takes different measures of exchange rate misalignment into consideration, expectations fail to anticipate currency crises.

Series:

Working Paper No. 1997/159

Subject:

Currency crises Cyclical indicators Economic growth Exchange rates Financial crises Foreign exchange Real exchange rates

English

Publication Date:

December 1, 1997

ISBN/ISSN:

9781451857634/1018-5941

Stock No:

WPIEA1591997

Pages:

19

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