International Finance Discussion Papers: Do Indicators of Financial Crises Work? An Evaluation of an Early Warning System

Language: English

Published by Books On Demand, Bibliogov, 2013

1288732708 / 9781288732708

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Seller: AHA-BUCH GmbH, Einbeck, GermanyAHA-BUCH GmbH

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Neuware - The object of this paper is to develop an operational early warning system (EWS) that can detect financial crises. To achieve this goal the paper analyzes and extends the early warning system developed by Kaminsky, Lizondo, and Reinhart (1998) and Kaminsky and Reinhart (1999) that is based on the 'signal' approach. This system monitors several indicators that tend to exhibit an unusual behavior in the periods preceding a crisis. When an indicator exceeds (or falls below) a threshold, then it is said to issue a 'signal' that a currency crisis may occur within a given period. The model does a fairly good job of anticipating some of the crises in 1997/1998, but several weaknesses to the approach are identified. The paper also evaluates how this system can be applied to an individual country. On balance, the results in this paper are mixed, but the results suggest that an early warning system should be thought of as a useful diagnostic tool.

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Title
International Finance Discussion Papers: Do Indicators of Financial Crises Work? An Evaluation of an Early Warning System
Author
United States Federal Reserve Board
Publisher
Books On Demand, Bibliogov
Publication year
2013
Condition
Neu
Binding
Taschenbuch
Language
English
ISBN 10
1288732708
ISBN 13
9781288732708
Item weight
169 grams
Dimensions
246x189x4 mm

AHA-BUCH GmbH

Einbeck, Germany

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