Over the last three decades, durations of recovery of output from contractionary currency crises have shown much variation both within and across countries. Using a dataset comprising of both developing and industrial countries, this paper examines the importance of economic fundamentals, international trade and liberalized capital account in determining the speed of recovery from such crises. We found that poor macroeconomic fundamentals and capital account liberalization have no significant effect on duration of recovery. However, all trade related variables were found to be significant. Our results indicate the preeminence of export led recovery.
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Paper provided by Rutgers University, Department of Economics in its series Departmental Working Papers with number
200607.
Find related papers by JEL classification: F30 - International Economics - - International Finance - - - General F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis
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