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Author: Morris Goldstein Publisher: Peterson Institute ISBN: 9780881322378 Category : Business & Economics Languages : en Pages : 166
Book Description
This study reviews the literature on the origins of currency and banking crises. It presents empirical tests on the performance of alternative early-warning indicators for emerging-market economies. The book also identifies crisis-threshold values for early-warning indicators.
Author: Morris Goldstein Publisher: Peterson Institute ISBN: 9780881322378 Category : Business & Economics Languages : en Pages : 166
Book Description
This study reviews the literature on the origins of currency and banking crises. It presents empirical tests on the performance of alternative early-warning indicators for emerging-market economies. The book also identifies crisis-threshold values for early-warning indicators.
Author: Morris Goldstein Publisher: ISBN: Category : Languages : en Pages : 47
Book Description
This paper aims to identify key empirical regularities in the run-up to banking and currency crises that would enable officials and private market participants to recognize vulnerability to financial crises at an earlier stage. This, in turn, should make it easier to motivate the corrective policy actions that would prevent such crises from actually taking place. Interest in identifying early warning indicators of financial crises has soared of late, stoked primarily by two factors. First, there is increasing recognition that banking and currency crises can be extremely costly to the countries in which they originate; in addition, these crises often spillover via a variety of channels to increase the vulnerability of other countries to financial crisis. The second reason for the increased interest in early warning indicators of financial crises is that there is accumulating evidence that two of the most closely watched market indicators of default and currency risks-namely, interest rate spreads and changes in credit ratings - frequently do not provide much advance warning of currency and banking crises. The other reason why market prices may not signal impending crises is that there are often widely and strongly-held expectations of a bail-out of a troubled borrower by the official sector be it national or international. Dooley has stressed this point in several papers. If interest rate spreads and sovereign credit ratings only give advance warning of financial crises once in a while, increased interest attaches to the question of whether there are other early-warning indicators that would do a better job, and if so, what are they? This is one of the key questions we address in this paper.
Author: Juan F. Castro Publisher: ISBN: Category : Languages : en Pages : 30
Book Description
The reduction of macroeconomic vulnerability in emerging markets is at the core of the research agenda. In this context, liability dollarization plays a vital role and its implications have been addressed in the literature via a quot;financial acceleratorquot; mechanism. After allowing for different degrees of liability dollarization in a general equilibrium framework, this analysis uncovers some important implications about the role of the asset price channel and central bank's commitment with the exchange rate, when assessing financial vulnerability. If we asses vulnerability in terms of the evolution of investment, we claim that, in absence of an asset price channel, departures from a pure float will not only help mitigate vulnerability but will also be welfare improving. On the other hand, and with an active asset price channel, a tighter exchange rate policy will only have marginal effects on welfare and vulnerability when compared to that associated to a reduction in liability dollarization.
Author: Mindaugas Leika Publisher: International Monetary Fund ISBN: 1484326792 Category : Business & Economics Languages : en Pages : 56
Book Description
Household financial fragility has received considerable attention following the global financial crisis, but substantial gaps remain in the analytical underpinnings of household financial vulnerability assessment, as well as in data availability. This paper aims at integrating the contributions in the literature in a coherent fashion. The study proposes also analytical and estimation extensions aimed at improving the quality of estimates and allowing the assessment of household financial vulnerability in presence of data limitations. The result of this effort is a comprehensive framework, that has wide applicability to both advanced and developing economies. For illustrative purposes the paper includes a detailed application to one developing country (Namibia).
Author: Morris Goldstein Publisher: Columbia University Press ISBN: 0881323047 Category : Business & Economics Languages : en Pages : 150
Book Description
The European currency crises of 1992-93, the Mexican crisis of 1994-95, and especially the Asian/global crisis of 1997-98, have all contributed to a heightened interest in the early warning signals of financial crises. This pathbreaking study presents a comprehensive battery of empirical tests on the performance of alternative early warning indicators for emerging-market economies that should prove useful in the construction of a more effective global warning system. Not only are the authors able to draw conclusions about which specific indicators have sent the most reliable early warning signals of currency and banking crises in emerging economies, they also test the out-of-sample performance of the model during the Asian crisis and find that it does a good job of identifying the most vulnerable economies. In addition, they show how the early warning system can be used to construct a "composite" crisis indicator to weigh the importance of alternative channels of cross-country "contagion" of crises, and to generate information about the recovery path from crises. This timely study comes on the eve of impending changes at the International Monetary Fund as that institution reexamines how it reacts to financial crises. Moreover, the study provides "... a wealth of valuable elements for anyone investigating and forecasting adverse developments in emerging markets as well as industrial countries," according to Ewoud Schuitemaker, vice president of the economics department at ABN AMRO Bank.
Author: Mr.Suman S Basu Publisher: International Monetary Fund ISBN: 1484333640 Category : Business & Economics Languages : en Pages : 42
Book Description
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.
Author: Emanuele Padovani Publisher: Routledge ISBN: 1000581659 Category : Political Science Languages : en Pages : 108
Book Description
Local Governments’ Financial Vulnerability presents a conceptual framework developed to examine how vulnerable local finances were before and in the immediate aftermath of the COVID-19 pandemic crisis by mapping and systematising its dimensions and sources. The model is then applied to eight countries with different administrative models and traditions: Australia, Austria, Bosnia and Herzegovina, Germany, Italy, Portugal, Spain, and the United States. Comparative results reveal not only that COVID-19 impacts and policy tools had a lot of similarities across countries, but also that financial vulnerability has an inherently contingent nature in time and space and can lead to paradoxical outcomes. The book shows that the impact of the crisis on local governments’ finances has been postponed and that financial vulnerability is expected to increase dramatically for a few years following the pandemic, especially in larger and richer municipalities which are traditionally more autonomous and less financially vulnerable. The authors provide timely insights and analytical tools that can be useful for both academic and public policy purposes, to further appreciate local governments’ financial vulnerability, especially during crises. This book is a valuable resource for practitioners and academics, as well as students of public policy, public management, financial management, and public accounting. Local governments can use the framework to better appreciate and manage their financial vulnerability, while oversight authorities can use it to help local governments become less financially vulnerable or, at least, more aware of their financial vulnerability. Financial institutions, advisors, and rating agencies may use this publication to refine or revise their models of credit risk assessment.
Author: Jack Fisher Publisher: ISBN: Category : Languages : en Pages : 26
Book Description
This paper describes a quantitative, data-driven method to assess vulnerabilities in a range of countries. We provide country-level vulnerability indices which can be used to gauge the level of fragility at any point in time. In particular, our results suggest that in the run-up to the Global Financial Crisis, vulnerabilities rose to extremely high levels in the United States, but were only a little above average in Europe and had actually receded across much of Asia. The picture has changed dramatically during the recovery, however, with vulnerabilities close to record-highs by end-2015 in some of the Asian economies. We document numerous practical challenges that arise when developing such a toolkit, the main one being to know the trend -- the 'neutral' level -- of a financial variable (for example credit-to-GDP). In that context, one important contribution of this paper is to document the robustness of vulnerability measures to different judgements about the trend level of financial variables. We find that for most countries results are fairly robust to different views of the underlying trend, but importantly that this robustness is not universal. In particular, at the moment differing views of what 'the new normal' is suggest dramatically different assessments of the level of fragility in the United States and South Korea.
Author: Morris Goldstein
Author: Morris Goldstein
Author: Morris Goldstein
Author: Juan F. Castro
Author: Tatjana Dahlhaus
Author: Mindaugas Leika
Author: Morris Goldstein
Author: Mr.Suman S Basu
Author: Emanuele Padovani
Author: Guillermo A. Calvo
Author: Jack Fisher