Towards A New Set Of Leading Indicators Of Currency Crisis For Developing Countries: An Application To Argentina
AbstractCurrency and financial crises are determinants of growth and development, mainly in developing countries subject to shocks, contagion and volatility. A relevant issue when trying to do the implementation of development policies is to anticipate or forecast the occurrence of currency crises that could turn good ideas into failure. This type of crises have strong negative economic, social and political consequences. This paper takes a look in the leading indicators literature and shows that this approach failed in predicting the Argentinean collapse of 2001-2002. We also show that particular features of the Argentinean economy needed of different indicators to forecast the collapse of the currency board system. The paper also developes some new indicators to include in an Early Warning System that can take on account specific features of Argentina´s economy. This indicators can be integrated into a wider set in order to be a useful tool for policymakers and authorities in Argentina and in other developing countries in the planification and implementation of development policies and programs.
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Bibliographic InfoPaper provided by EconWPA in its series Public Economics with number 0512011.
Length: 37 pages
Date of creation: 23 Dec 2005
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currency crisis - exchange rate - leading indicators - Argentina;
Find related papers by JEL classification:
- D6 - Microeconomics - - Welfare Economics
- D7 - Microeconomics - - Analysis of Collective Decision-Making
- H - Public Economics
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-01-01 (All new papers)
- NEP-DEV-2006-01-01 (Development)
- NEP-FMK-2006-01-01 (Financial Markets)
- NEP-IFN-2006-01-01 (International Finance)
- NEP-PBE-2006-01-01 (Public Economics)
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