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Predictability Of Financial Crises: Testing K.R.L. Model In The Case Of Turkey

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Author Info

  • Zeynep KARACOR

    (Sel├žuk University, Department of Economics Konya, Turkey)

  • Korhan GOKMENOGLU

    (University of California (San Diego))

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    Abstract

    The aim of this study is to test predictability of 2007 Global Economic Crisis which hit Turkey by the help of macroeconomic data of Turkey. K.R.L. model is used to test the predictability. By the method of analyzing various leading early warning indicators, the success of the model in forecasting the crises is surveyed. The findings do not support K.R.L. models. Possible reasons for this are stated at the article.

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    Bibliographic Info

    Article provided by Constantin Brancusi University, Faculty of Economics in its journal Constatin Brancusi University of Targu Jiu Annals - Economy Series.

    Volume (Year): 2 (2012)
    Issue (Month): (June)
    Pages: 5-16

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    Handle: RePEc:cbu:jrnlec:y:2012:v:2:p:5-16

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    Related research

    Keywords: Financial Crises; Leading Indicators; Signal Approach; K.R.L. Model;

    References

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    1. Sebastian Edwards, 2002. "Does the Current Account Matter?," NBER Chapters, National Bureau of Economic Research, Inc, in: Preventing Currency Crises in Emerging Markets, pages 21-76 National Bureau of Economic Research, Inc.
    2. Reinhart, Carmen & Kaminsky, Graciela, 1999. "The twin crises: The causes of banking and balance of payments problems," MPRA Paper 14081, University Library of Munich, Germany.
    3. Obstfeld, Maurice, 1996. "Models of Currency Crises with Self-fulfilling Features," CEPR Discussion Papers, C.E.P.R. Discussion Papers 1315, C.E.P.R. Discussion Papers.
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    7. Lin, Chin-Shien & Khan, Haider A. & Chang, Ruei-Yuan & Wang, Ying-Chieh, 2008. "A new approach to modeling early warning systems for currency crises: Can a machine-learning fuzzy expert system predict the currency crises effectively?," Journal of International Money and Finance, Elsevier, Elsevier, vol. 27(7), pages 1098-1121, November.
    8. Eichengreen, Barry & Rose, Andrew K & Wyplosz, Charles, 1996. "Contagious Currency Crises," CEPR Discussion Papers, C.E.P.R. Discussion Papers 1453, C.E.P.R. Discussion Papers.
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    10. Reinhart, Carmen & Kaminsky, Graciela & Lizondo, Saul, 1998. "Leading Indicators of Currency Crises," MPRA Paper 6981, University Library of Munich, Germany.
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    13. Leblang, David & Satyanath, Shanker, 2008. "Politically generated uncertainty and currency crises: Theory, tests, and forecasts," Journal of International Money and Finance, Elsevier, Elsevier, vol. 27(3), pages 480-497, April.
    14. Flood, Robert P. & Garber, Peter M., 1984. "Collapsing exchange-rate regimes : Some linear examples," Journal of International Economics, Elsevier, Elsevier, vol. 17(1-2), pages 1-13, August.
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