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Early Warning System: An Assessment of Vulnerability

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  • Reinhart, Carmen
  • Goldstein, Morris
  • Kaminsky, Graciela

Abstract

Predicting the timing of currency and banking crises is likely to remain an elusive task for academics, financial market participants, and policymakers. Few foresaw the Asian crises and fewer still could have imagined their severity. However, recent events have highlighted the importance of improving upon a system of “early warnings.” The signals approach introduced in Kaminsky and Reinhart (1996) and applied to the out-of-sample data during January 1996- June 1997 in this section we illustrate how this approach can ne applied to glean where trouble spots may be brewing.

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File URL: http://mpra.ub.uni-muenchen.de/24579/
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File URL: http://mpra.ub.uni-muenchen.de/45128/
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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 24579.

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Date of creation: 2000
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Handle: RePEc:pra:mprapa:24579

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Related research

Keywords: eraly warning; crisis; banking; currency; indicators; capital flows; current account; exchange rates; Asia; Latin America;

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References

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  1. Edward, Sebastian, 1986. "Are Devaluations Contractionary?," The Review of Economics and Statistics, MIT Press, vol. 68(3), pages 501-08, August.
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Cited by:
  1. Juan Amador & José Gómez-González & Andrés Pabón, 2013. "Loan growth and bank risk: new evidence," Financial Markets and Portfolio Management, Springer, vol. 27(4), pages 365-379, December.
  2. Juan Sebastián Amador Torres & José Eduardo Gómez G. & Andrés Murcia Pabón, 2013. "Loans Growth and Banks´ Risk: New Evidence," BORRADORES DE ECONOMIA 010710, BANCO DE LA REPÚBLICA.

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