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Explaining Financial Crises in Emerging Markets: A logit model on the Turkish data (1984-2001)

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  • Mete Feridun

    () (Cyprus International University Nicosia, Cyprus.)

Abstract

This article aims at explaining the financial crises Turkey experienced in the last decade through a random effects logit model which incorporates 26 macroeconomic, political, and financial sector variables. Evidence emerges that the only significant variablesare current account/GDP, fiscal balance/GDP, GDP per capita, national savings growth, foreign exchange reserves, terms of trade, stock prices, and import growth. Results indicate that all variables have expected signs with the exception of import growth.

Suggested Citation

  • Mete Feridun, 2005. "Explaining Financial Crises in Emerging Markets: A logit model on the Turkish data (1984-2001)," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 10(1), pages 33-47, Jan-Jun.
  • Handle: RePEc:lje:journl:v:10:y:2005:i:1:p:33-47
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    References listed on IDEAS

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    1. Graciela Kaminsky & Saul Lizondo & Carmen M. Reinhart, 1998. "Leading Indicators of Currency Crises," IMF Staff Papers, Palgrave Macmillan, vol. 45(1), pages 1-48, March.
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    7. Asli Demirgüç-Kunt & Enrica Detragiache, 1997. "The Determinants of Banking Crises; Evidence From Developing and Developed Countries," IMF Working Papers 97/106, International Monetary Fund.
    8. Berg, Andrew & Pattillo, Catherine, 1999. "Predicting currency crises:: The indicators approach and an alternative," Journal of International Money and Finance, Elsevier, vol. 18(4), pages 561-586, August.
    9. Y?lmaz Akyüz & Korkut Boratav, 2002. "The Making Of The Turkish Financial Crisis," UNCTAD Discussion Papers 158, United Nations Conference on Trade and Development.
    10. Demetriades, Panicos O. & Hussein, Khaled A., 1996. "Does financial development cause economic growth? Time-series evidence from 16 countries," Journal of Development Economics, Elsevier, vol. 51(2), pages 387-411, December.
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