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Early Warning System: Empirical Results from The Signals Approach

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

The signals approach was applied to 24 of the indicators around the dates of the 29 banking and the 87 currency crises. In what follows, we first compare our results for the 15 original indicators in Kaminsky and Reinhart (1996) to those presented in that study. This exercise assesses the robustness of their results as to the individual performance of the indicators. In particular, the sample size has been expanded by including 26 years worth of data for an additional five countries. Second, we examine the performance of many of the indicators that have been stressed in the financial press surrounding the coverage of the Asian crises, including both conventional indicators, such as the current account deficit, as well as indicators which stress the composition of international capital flows.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 24577.

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Date of creation: 2000
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Handle: RePEc:pra:mprapa:24577
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  1. Graciela L. Kaminsky, 1998. "Currency and banking crises: the early warnings of distress," International Finance Discussion Papers 629, Board of Governors of the Federal Reserve System (U.S.).
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  7. Reinhart, Carmen & Calvo, Sara, 1996. "Capital Flows to Latin America: Is There Evidence of Contagion Effects?”," MPRA Paper 7124, University Library of Munich, Germany.
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  25. Doukas, John, 1989. "Contagion effect on sovereign interest rate spreads," Economics Letters, Elsevier, vol. 29(3), pages 237-241.
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