The determinants of currency crises

a political economy approach by Bjoern Rother

Publisher: Palgrave Macmillan in Basingstoke

Written in English
Published: Pages: 188 Downloads: 808
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Subjects:

  • Währungspolitik,
  • Monetary policy,
  • Currency crises,
  • Währungskrise
  • About the Edition

    A lot of research has been carried out on currency crises, but the existing literature largely fails to adequately recognize the role of politics in creating financial turbulence. This book explains the role of political factors in the occurrence of currency crises. It starts out with a discussion of political developments in four prominent crisis cases, including Turkey and Argentina in the early 2000s, before discussing various extensions of a workhorse model of the economics literature, two of which are original, to show how upcoming elections, intra-governmental conflict, and lobbying activity can impact the stability of an exchange rate regime. The econometric analysis uses a diverse sample of 69 countries over 1975-97 to determine whether the inclusion of political variables can make a difference in crisis prediction without adding too much complexity, compared with standard early-warning-systems models that rely exclusively on macroeconomic fundamentals. This book provides a thorough and in-depth report, seeking to translate concepts from the discipline of political science into the language of economics. It is essential reading for all interested in international political economy and financial crises.

    Edition Notes

    Includes bibliographical references (p. 171-182) and index.

    StatementBjörn Rother
    Classifications
    LC ClassificationsHG3851.3 .R68 2009
    The Physical Object
    Paginationix, 188 p. :
    Number of Pages188
    ID Numbers
    Open LibraryOL25253819M
    ISBN 100230221815
    ISBN 109780230221819
    LC Control Number2012360292
    OCLC/WorldCa318674389

Currency substitution or dollarization is the use of a foreign currency in parallel to or instead of the domestic currency.. Currency substitution can be full or partial. Most, if not all, full currency substitution has taken place after a major economic crisis, for example, Ecuador and El Salvador in Latin America and Zimbabwe in Africa. Some small economies, for whom it is impractical to. Currency Wars: The Making of the Next Global Crisis is ostensibly that: a book about currency wars. But while much of the book does indeed focus on competitive devaluation, what Currency Wars really boils down to is James Rickards' love affair with the gold standard, and, to a lesser extent, his libertarian values and pride in 'Murica ("a 4/5(). A currency crisis is a situation in which serious doubt exists as to whether a country's central bank has sufficient foreign exchange reserves to maintain the country's fixed exchange crisis is often accompanied by a speculative attack in the foreign exchange market. A currency crisis results from chronic balance of payments deficits, and thus is also called a balance of payments crisis. In this paper, an early warning system will be developed to explain any potential currency crisis and identify a number of leading indicators that can help the understanding of the crises, using Jordanian data. The methodology of this paper includes utilizing the Multinomial Logit analysis. The paper has found evidence that number of key indicators including real exchange rate (RER), money.

Determinants of Currency Crises in Emerging Markets The Case of Turkey?zge Qe?meci and A,?zlem?nder ABSTRACT: This paper investigates possible determinants of currency crises in Turkey. We use three different techniques?namely, the signaling approach, structural model, and Markov switching model with monthly data for the period The results. This paper attempts to estimate the determinants of crises on Islamic banking system during financial crises using early warning system (EWS) with particular focus on the element of profit–loss sharing. Profit–loss sharing has significant impact in reducing crisis probability experienced by . Economists and policymakers are still trying to understand the lessons recent financial crises in Asia and other emerging market countries hold for the future of the global financial system. In this timely and important volume, distinguished academics, officials in multilateral organizations, and public and private sector economists explore the causes of and effective policy responses to. This paper examines the determinants of currency crises in Latin America, Asia and Africa. It asks two basic questions: (a) Are currency crises linked to economic fundamentals? and; (b) Is there any evidence of a contagion effect after controlling for the potential effects of economic fundamentals? Using pooled annual data for 19 developing countries spanning […].

Currency Choice T he exchange rate is the most important price in any economy, for it affects all other prices. The exchange rate is itself set or No part of this book may be distributed, posted, or reproduced in any form by digital or mechanical means without prior written permission of the publisher. Essays by prominent scholars and policymakers honor one of the most influential macroeconomists of the last thirty years, discussing the themes behind his work. Guillermo Calvo, one of the most influential macroeconomists of the last thirty years, has made pathbreaking contributions in such areas as time-inconsistency, lack of credibility, stabilization, transition economies, debt maturity. This chapter addresses the relative importance of financial fragility and external imbalances in the Asian financial crises. It compares the performance of all the Asian countries subject to pressures in with the performance of other emerging economies, for a total sample of twenty-four countries whose selection has been determined by data availability. Properties of Realized Correlation. Pricing the Currency Premium Under Flexible Exchange Rates. Determinants of Foreign Direct Investment in Thailand. A Comparison of Financial Robustness in the United States and Turkey During The Impact of the Global Financial Crisis on Emerging Financial Markets.

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This book explores the role of political factors in the occurrence of currency crises, using an eclectic approach that blends case studies, a rigorous theoretical discussion, and econometric : Palgrave Macmillan UK.

The Determinants of Currency Crises - by B Rother (Hardcover) $ 0 out of 5 stars with 0 reviews. be the first. be the first. ratings. Help us improve this page. About this item. Details. This book explains the role of political factors in the occurrence of currency crises.

It starts out with a discussion of political developments in Price: $ Introduction This book explores the role of political factors in the occurrence of currency crises, using an eclectic approach that blends case studies, a rigorous theoretical discussion, and econometric analysis.

The Determinants of Currency Crises by Bjorn Rother,available at Book Depository with free delivery : Bjorn Rother.

Get this from a library. The determinants of currency crises: a political economy approach. [Bjoern Rother] -- A lot of research has been carried out on currency crises, but the existing literature largely fails to adequately recognize the role of politics in creating financial turbulence.

The determinants of currency crises book book explains. This book explores the role of political factors in the occurrence of currency crises, using an eclectic approach that blends case studies, a rigorous theoretical discussion, and econometric analysis.

Title: The Determinants of Banking Crises in Developing and Developed Countries Created Date: 3/11/ PM. indicators were found to be important in determining currency crises, and included macroeconomic fundamentals, such as the real exchange rate, the money supply-reserves ratio, the growth rate of domestic credit, the current account balance and the debt-GDP ratio.

Determinants of currency crises in the Republic of Serbia*1 Ivana Marjanović2, Milan Marković3 Abstract The aim of this study is to overcome the lack of empirical research dealing with the main factors of currency crises in the Republic of Serbia, analyzing periods of currency crises and creating an early warning system to anticipate the upcoming.

Our results indicate that the variables belonging to the set of macroeconomic fundamentals proposed by the literature are very fragile determinants of the occurrence of currency crises. The results improve if the crisis index identifies a crisis period (defined as the period up to a year before a crisis) instead of a crisis by: On Determinants of the Depth of Currency Crisis: Fundamentals, Contagion, and Financial Liberalization* September Masazumi Hattori ** Abstract This paper contains an empirical analysis of the "depth" of the Mexican Currency Crisis () and the East Asian Currency Crisis ().

The purpose is toattempt toCited by: 1. "This excellent book is for anyone who has ever wondered about the origins of the Eurozone, the causes of the currency crises, and the importance of the classical gold standard.

Frieden combines lively historical narratives with statistical analyses to show that currency politics are pretty much the same across time and space.

Moving towards the s, the empirical research increasingly involved a search for common determinants of crises. The empirical study in Chapter 3 analyses the causes of currency and financial crises in 31 emerging market countries in – The determinants of banking crises: Further evidence March 3, Guillermo Peña* ABSTRACT This paper employs a new dataset of 36 EU and OECD countries for the period – to test the importance of economic inequality in banking crises and to find new determinants of them.

We estimated a panel logit model with population-averaged. According to the results, short-term debt/GDP, real exchange rate, deposit interest rates, foreign exchange reserves/imports, and credit/deposit variables are all significant in.

This paper investigates the role of external balance sheet variables as determinants of currency crises in emerging market (EME) and advanced economies.

A random effect probit model is used in a panel of 40 countries with monthly data over the January –December period. The main results of the paper are as follows.

The results suggest that crises tend to erupt when the macroeconomic environment is weak, particularly when growth is low and inflation is high. Also, high real interest rates are clearly associated with systemic banking sector problems, and there is some evidence that vulnerability to balance of payments crises has played a role.

from tothey identified a total of currency crises, of which 10 crises oc curred in the periodbanking and 66 debt crises (Figure no.1). The resul ts show that the real determinants of financial crisis are stru ctural in unstable monetary system (interest system and fiat money system), poo r gov ernance (administered price), and.

"On the Determinants of Currency Crises: The Role of Model Uncertainty," Focus on European Economic Integration, Oesterreichische Nationalbank (Austrian Central Bank), issue 2, pages Jesus Crespo Cuaresma & Tomas Slacik, "undated".

currency crisis. Some models stress how distortions may emerge in the form of credit constraints. Aghion, Bacchetta, and Banerjee (), for example, highlight that an initial depreciation of a currency raises the cost of foreign-currency debt obligations of firms and lowers profits, which in.

This paper investigates the role of external balance sheet variables as determinants of currency crises in emerging market (EME) and advanced economies. A random effect probit model is used in a panel of 40 countries with monthly data over the January December period.

The main results of the paper are as follows. This article investigates the role of external balance sheet variables as determinants of currency crises in emerging market (EME) and advanced economies. A random effect probit model is used in a panel of 40 countries with monthly data during the January –December period.

The main results of the article are as follows. Several twin crises occurred in the Turkish economy in the last three decades. In this article, we aim to analyze the link between banking and currency crises and to illustrate the essential determinants of these twin crises by developing a multivariate logit model for the period – Downloadable.

In the s and s several countries experienced banking crises. The authors try to identify features of the economic environment that tend to breed problems in the banking sector. They do so by economically estimating the probability of a systemic crisis, applying a multivariate logic model to data from a large panel of countries, both industrial and developing, for the.

Global Imbalances, Financial Crises, and Central Bank Policies assesses the relationships between global imbalances, financial crises, and central bank policies, with a specific focus on their reserves. The book contains a strictly international perspective with an analysis based on empirical research that enables the reader to develop an analytical model that emphasizes interactions among.

Title: The Determinants of Banking Crises: Evidence feom Developing and Develop ed Countries - WP/97/ Created Date: 9/26/ AM. Currency Politics is a subject of heightened interest today given the global economic backdrop. Jeffrey Frieden gives a perspective on the political economy nature of currency politics by outlining the relevant economics and then analyzing the political ramifications in some specific illuminating s: 7.

Currency Crisis in Developing Countries: Role of Weak Fundamentals Maryna Derkach, Vanderbilt University, USA. Abstract: The paper examines the determinants of foreign exchange market instabilities in developing countries during the global financial crisis of.

Introduction to "Currency Crises" Paul R. Krugman. Chapter in NBER book Currency Crises (), Paul Krugman, editor (p. 1 - 6) Published in January by University of Chicago Press Social Security: Panel on Economic Determinants of Fertility Behavior. Indices (EMPI) as proxies for currency crises.

Due to a high correlation between the inflow and outflow capital control measures, the joint confidence ellipsoid (region) technique is used.

This technique confirms that these capital controls have significantly different influences on currency crises. The analyses use various currency crises.tant determinants of countries’ vulnerability to recent currency crises. It de-composes trade linkages into three channels by which a country could be affected by a crisis elsewhere in the world: a competitiveness e ffect (in which changes in relative prices affect a.

Currency crises can come in multiple forms but are largely formed when investor sentiment and expectations do not match the economic outlooks of a country.