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Dating Banking Crises in Middle-income Countries

Author

Listed:
  • Akbar Mousavi, Seyyed Saleh

    (Ph.D. Candidate in Economics, University of Tabriz)

  • Salmani, Behzad

    (Professor of Economics, University of Tabriz)

  • Haghighat, Jafar

    (Professor of Economics, University of Tabriz)

  • Asgharpour, Hossein

    (Professor of Economics, University of Tabriz)

Abstract

One of the issues raised about crises is dating them. If the date of crises are determined, future problems can be reduced by adopting appropriate policies. Banking crises are not an exception to this rule as one types of financial crises. Hence, in the present study, the dates of the banking crisis were determined by calculating the modified money market pressure index for low middle-income and high middle-income countries over the period of 1980-2019. Then, obtained dates were compared with dates of Laeven and Valencia (2020) by calculating the Kappa coefficient. The results of this comparison show a matching of about 10 percent for low middle-income countries and about 30 percent for high middle-income countries between crisis dates of the present study and the study of Laeven and Valencia (2020). Also, the investigation of inflation and real GDP growth for the studied countries showed that inflation is a suitable leading indicator for early warning of banking crisis. The decline in real GDP growth in the post-crisis years was also cited as one of the problems of the banking crisis

Suggested Citation

  • Akbar Mousavi, Seyyed Saleh & Salmani, Behzad & Haghighat, Jafar & Asgharpour, Hossein, 2021. "Dating Banking Crises in Middle-income Countries," Quarterly Journal of Applied Theories of Economics, Faculty of Economics, Management and Business, University of Tabriz, vol. 8(1), pages 115-144, June.
    • Handle: RePEc:ris:qjatoe:0220
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    More about this item

    Keywords

    Banking Crisis; Dating Crises; Money Market Pressure Index;
    All these keywords.

    JEL classification:

    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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