Front Matter
Author:
Mr. Richard Hemming
Search for other papers by Mr. Richard Hemming in
Current site
Google Scholar Close
,
Mr. Axel Schimmelpfennig
Search for other papers by Mr. Axel Schimmelpfennig in
Current site
Google Scholar Close
, and
Mr. Michael Kell
Search for other papers by Mr. Michael Kell in
Current site
Google Scholar Close
Language:
English
Keywords:
OP; crisis; debt; deficit; short-term debt
Download PDF (620.3 KB)

Abstract

Fiscal problems have long been considered a central feature of financial--that is, currency, debt, and banking--crises. This paper addresses four questions: What are the fiscal causes of crises? Which fiscal vulnerability indicators help to predict crises? Can fiscal variables explain the severity of crises? And what are the fiscal consequences of crises? Its findings are based on statistical analysis of a large data set of fiscal variables for 29 emerging market economies over 1970-2000 and detailed case studies of 11 emerging market crises during the 1990s that focus on structural and institutional dimensions of fiscal vulnerability.

© 2003 International Monetary Fund

Production: IMF Multimedia Services Division

Typesetting: Alicia Etchebarne-Bourdin

Figures: Theodore F. Peters, Jr.

Cataloging-in-Publication Data

Hemming, Richard

Fiscal vulnerability and financial crises in emerging market economies / Richard Hemming, Michael Kell, and Axel Schimmelpfennig — Washington, D.C.: International Monetary Fund, 2003

p. cm. — (Occasional paper, ISSN 0251-6365; 218)

Includes bibliographical references.

ISBN 1-58906-196-9

1. Fiscal policy. 2. Financial crises. 3. Currency question. I. Kell, Michael. II. Schimmelpfennig, Axel. III. International Monetary Fund. IV. Occasional paper (International Monetary Fund); no. 218

HJ192.5.H35 2003

Price: US$25.00

(US$17.50 to full-time faculty members and students at universities and colleges)

Please send orders to:

International Monetary Fund, Publication Services

700 19th Street, N.W., Washington, D.C. 20431, U.S.A.

Tel.: (202) 623–7430 Telefax: (202) 623–7201

E-mail: publications@imf.org

Internet: http://www.imf.org

Contents

  • Preface

  • I Overview

  • II Background

    • Definitions

    • Assessing Fiscal Vulnerability

    • Conclusions from the Literature

  • III Data and Event Studies

    • Data

    • Event Studies

    • Summary of Findings

  • IV EWS Models and the Severity of Currency Crises

    • Using Fiscal Variables to Predict Crises

    • Fiscal Variables and the Severity of Currency Crises

    • Summary of Findings

  • V Case Studies

    • Fiscal Causes of Crises

    • Fiscal Indicators

    • Fiscal Consequences of Crises

  • VI Conclusions

    • What Are the Fiscal Causes of Crises?

    • Which Fiscal Vulnerability Indicators Help to Predict Crises?

    • Can Fiscal Variables Explain the Severity of Currency Crises?

    • What Are the Fiscal Consequences of Crises?

  • Appendixes

  • I Literature Review

  • II Country and Area Coverage and Data Availability

  • III Event Studies

  • IV EWS Models and the Severity of Currency Crises

  • V Case Studies

  • References

  • Boxes

    • 2.1. Currency, Debt, and Banking Crises

    • 3.1. Fiscal Variables

  • Text Tables

    • 4.1. Summary Results from the Signals Approach

    • 4.2. Summary of Probit EWS Results

    • 4.3. Explaining the Severity of Currency Crises (STV Approach)

    • 4.4. Explaining Changes in the FMP Index (Panel Approach, Fixed Effects)

    • 5.1. Causes of Crises

    • 5.2. Fiscal Consequences of Crises

  • Appendix Tables

    • A1.1. Literature Review: Empirical Studies of Financial Crises

    • A2.1. Countries and Areas Included in EWS and Event Studies

    • A2.2. Dates of Crisis Episodes

    • A2.3. Description and Sources of Fiscal Variables

    • A2.4. Data Availability

    • A4.1. Performance of Indicators of Currency Crises Using the Signals Approach

    • A4.2. Performance of Indicators of Debt Crises Using the Signals Approach

    • A4.3. Performance of Indicators of Banking Crises Using the Signals Approach

    • A4.4. Country-Specific Thresholds for Currency Crises

    • A4.5. Country-Specific Thresholds for Debt Crises

    • A4.6. Country-Specific Thresholds for Banking Crises

    • A4.7. Regression Results for the DCSD Specification (Maximum Sample)

    • A4.8. Regression Results for Deficit and Financing Variables (Joint Sample)

    • A4.9. Regression Results for Reduced Set of Deficit and Financing Variables (Maximum Sample)

    • A4.10. Regression Results for Selected Fiscal Variables

    • A4.11. Explaining Crisis Depth (Benchmark Specification)

    • A4.12. Best Performers Among Fiscal Variables

    • A4.13. Benchmark Specification for Panel Approach (Fixed Effects)

    • A4.14. Including Deficit and Financing Variables in the Benchmark Specification (Panel Approach, Fixed Effects)

    • A4.15. Including Public Debt Variables Individually in the Benchmark Specification (Panel Approach, Fixed Effects)

    • A4.16. Including Government Expenditure Variables in the Benchmark Specification (Panel Approach, Fixed Effects)

    • A4.17. Best Performers Among Fiscal Variables (Panel Approach, Fixed Effects)

    • A5.1. Mexico: Selected Fiscal Vulnerability Indicators (Annual)

    • A5.2. Mexico: Selected Fiscal Vulnerability Indicators (Quarterly)

    • A5.3. Argentina: Selected Fiscal Vulnerability Indicators (Annual)

    • A5.4. Argentina: Selected Fiscal Vulnerability Indicators (Quarterly)

    • A5.5. Bulgaria: Selected Fiscal Vulnerability Indicators

    • A5.6. Czech Republic: Selected Fiscal Vulnerability Indicators

    • A5.7. Thailand: Selected Fiscal Vulnerability Indicators (Annual)

    • A5.8. Thailand: Selected Fiscal Vulnerability Indicators (Quarterly)

    • A5.9. Korea: Selected Fiscal Vulnerability Indicators (Annual)

    • A5.10. Korea: Selected Fiscal Vulnerability Indicators (Quarterly)

    • A5.11. Pakistan: Selected Fiscal Vulnerability Indicators

    • A5.12. Russia: Selected Fiscal Vulnerability Indicators (Annual)

    • A5.13. Russia: Selected Fiscal Vulnerability Indicators (Quarterly)

    • A5.14. Ukraine: Selected Fiscal Vulnerability Indicators

    • A5.15. Brazil: Selected Fiscal Vulnerability Indicators

    • A5.16. Ecuador: Selected Fiscal Vulnerability Indicators

  • Figures

    • 3.1. Number of Crises in the Sample

    • 3.2. Overall Balance

    • 3.3. Public External Debt

    • 3.4. Short-Term Debt

  • Appendix Figures

    • A3.1. Actuarial Deficit

    • A3.2. Total Financing

    • A3.3. Change in Net Claims on Government

    • A3.4. Foreign Debt

    • A3.5. Total Expenditure

    • A3.6. Interest Expenditure

    • A3.7. Social Expenditure

    • A3.8. International Trade Taxes

The following symbols have been used throughout this paper:

  • … to indicate that data are not available;

  • — to indicate that the figure is zero or less than half the final digit shown, or that the item does not exist;

  • – between years or months (e.g., 2001–02 or January-June) to indicate the years or months covered, including the beginning and ending years or months;

  • / between years (e.g., 2001/02) to indicate a fiscal (financial) year.

“n.a.” means not applicable.

“Billion” means a thousand million.

Minor discrepancies between constituent figures and totals are due to rounding.

The term “country,” as used in this paper, does not in all cases refer to a territorial entity that is a state as understood by international law and practice; the term also covers some territorial entities that are not states, but for which statistical data are maintained and provided internationally on a separate and independent basis.

Preface

This Occasional Paper focuses on the fiscal aspects of financial crises in emerging market economies, and as such fills a gap in the crisis literature. The discussion in the paper is based on statistical analysis of a large dataset of fiscal variables and case studies of eleven emerging market crises during the 1990s. The paper concludes that there are several important fiscal causes of crises, related to the size of deficits and their financing, the level and composition of public debt, and structural fiscal factors. Some fiscal indicators are useful for predicting crises, including banking crises. That said, fiscal indicators add little to existing early warning system models in terms of calling crises, but may be useful in improving the ability of such models to predict tranquil periods. It is found that crises tend to put upward pressure on deficits and add to debt as output falls, the exchange rate depreciates, and the government has to cover the costs of bank restructuring. However, the fiscal adjustment usually required in response to a crisis more than offsets the underlying increase in deficits. Crises have also proved to be a catalyst for difficult structural fiscal reforms.

The authors are especially indebted to Teresa Ter-Minassian for her overall guidance and support, to Nigel Chalk and Tony Annett for their contributions to the case studies, and to Estella Macke for excellent research assistance. They would also like to thank Andy Berg, Marco Cangiano, Luis Cubeddu, James Daniel, Liam Ebrill, Hali Edison, Anne-Marie Guide, Paolo Manasse, Luiz de Mello, Eric Mottu, Saleh Nsouli, Carmen Reinhart, Nouriel Roubini, Gerd Schwartz, and Hung Tran for their helpful comments on earlier drafts, and colleagues in area departments and the offices of Executive Directors who commented on the case studies. Administrative assistance was provided by Constanza Bryant, Veronique Catany, and Mileva Radisavljeviç. Esha Ray of the External Relations Department edited the paper and coordinated its publication.

The opinions expressed in the paper are those of the authors and do not necessarily reflect the views of national authorities, the IMF, or IMF Executive Directors.

Cited By

  • Collapse
  • Expand
Cover Fiscal Vulnerability and Financial Crises in Emerging Market Economies
Fiscal Vulnerability and Financial Crises in Emerging Market Economies
ISBN:
9781589061965
ISSN:
0251-6365
Publication Date:
23 May 2003
Publisher:
International Monetary Fund
DOI:
https://doi.org/10.5089/9781589061965.084
Pages:
131

  • Agénor, Pierre-Richard, and Peter Montiel, 1999, Development Macroeconomics (Princeton, New Jersey: Princeton University Press, 2nd ed.)

    • Search Google Scholar
    • Export Citation

  • Alesina, Alberto, and Roberto Perotti, 1995, “The Political Economy of Budget Deficits,” Staff Papers, International Monetary Fund, Vol. 42 (March), pp. 1–31.

    • Search Google Scholar
    • Export Citation

  • Allen, Mark, Christoph Rosenberg, Christian Keller, Brad Setser, and Nouriel Roubini, 2002, “A Balance Sheet Approach to Financial Crisis,” IMF Working Paper No. 02/210 (Washington: International Monetary Fund).

    • Search Google Scholar
    • Export Citation

  • Aziz, Jahangir, Francesco Caramazza, and Ranil Salgado, 2000, “Currency Crises: In Search of Common Elements,” IMF Working Paper No. 00/67 (Washington: International Monetary Fund).

    • Search Google Scholar
    • Export Citation

  • Barth, James, Gerard Caprio, and Ross Levine, 2000, “Banking Systems Around the Globe: Do Regulation and Ownership Affect Performance and Stability?” Policy Research Paper No. 2325 (Washington: World Bank).

    • Search Google Scholar
    • Export Citation

  • Begg, David, 1998, “Pegging Out: Lessons from the Czech Exchange Rate Crisis,” Journal of Comparative Economics Vol. 26, No. 12, pp. 669–90.

    • Search Google Scholar
    • Export Citation

  • Beim, David O., and Charles W. Calomiris, 2001, Emerging Financial Markets (Boston: McGraw-Hill/Irwin).

  • Bell, James, 2000, “Leading Indicator Models of Banking Crises: A Critical Review,” Financial Stability Report, December (London: Financial Services Authority).

    • Search Google Scholar
    • Export Citation

  • Berg, Andrew, and Catherine Pattillo, 1999, “Are Currency Crises Predictable? A Test,” IMF Staff Papers, Vol. 46 (June), pp. 107–38.

    • Search Google Scholar
    • Export Citation

  • Berg, Andrew, Eduardo Borensztein, and Catherine Pattillo, 2003, “Assessing Early Warning Systems: How Have They Worked in Practice?” (unpublished; Washington: International Monetary Fund).

    • Search Google Scholar
    • Export Citation

  • Bléjer, Mario I., and Graciana del Castillo, 1998, “Deja Vu All Over Again?: The Mexican Crisis and the Stabilization of Uruguay in the 1970s,” World Development, Vol. 26, No. 3, pp. 449–64.

    • Search Google Scholar
    • Export Citation

  • Bordo, Michael, Barry Eichengreen, Daniela Klingebiel, and Maria Soledad Martinez Peria, 2001, “Financial Crises: Lessons From the Last 120 Years,” Economic Policy: A European Forum, No. 32 (April), pp. 51–82.

    • Search Google Scholar
    • Export Citation

  • Brixi, Hana Polackova, Hafez Ghanem, and Roumeen Islam, 1999, “Fiscal Adjustment and Contingent Liabilities: Case Studies of the Czech Republic and Macedonia,” Policy Research Paper No. 2177 (Washington: World Bank).

    • Search Google Scholar
    • Export Citation

  • Brixi, Hana Polackova, Allen Schick, eds., 2002, Government at Risk: Contingent Liabilities and Fiscal Risk (Washington: World Bank).

  • Brüggemann, Axel, and Thomas Linne, 1999, “How Good Are Leading Indicators for Currency and Banking Crises in Central and Eastern Europe? An Empirical Test” Discussion Paper No. 95 (Halle, Germany: Institut fur Wirtschaftsforschung Halle).

    • Search Google Scholar
    • Export Citation

  • Brüggemann, Axel, and Thomas Linne, 2002, “Are the Central and Eastern European Transition Countries Still Vulnerable to a Financial Crisis?” BOFIT Discussion Paper No. 5 (Finland: Bank of Finland Institute for Economies in Transition).

    • Search Google Scholar
    • Export Citation

  • Burnside, Craig, Martin Eichenbaum, and Sérgio Rebelo, 1999, “Prospective Deficits and the Asian Currency Crisis,” Policy Research Paper No. 2174M (Washington: World Bank).

    • Search Google Scholar
    • Export Citation

  • Burnside, Craig, Martin Eichenbaum, and Sérgio Rebelo, 2001, “On the Fiscal Implications of Twin Crises,” NBER Working Paper No. 8277 (Cambridge, Massachusetts: National Bureau of Economic Research).

    • Search Google Scholar
    • Export Citation

  • Bussiere, Matthieu, and Christian Mulder, 1999, “External Vulnerability in Emerging Market Economies: How High Liquidity Can Offset Weak Fundamentals and the Effects of Contagion,” IMF Working Paper No. 99/88 (Washington: International Monetary Fund).

    • Search Google Scholar
    • Export Citation

  • Calomiris, Charles W., 1998, “The IMF’s Imprudent Role as Lender of Last Resort,” Cato Journal, Volume 17, No. 3 (Winter), pp. 275–94.

    • Search Google Scholar
    • Export Citation

  • Calvo, Guillermo, 1988, “Servicing the Public Debt: The Role of Expectations,” American Economic Review, Vol. 78 (September), pp. 647–61.

    • Search Google Scholar
    • Export Citation

  • Calvo, Guillermo, 1995, “Varieties of Capital-Market Crises,” Working Paper No. 15 (Baltimore, Maryland: University of Maryland Center for International Economics).

    • Search Google Scholar
    • Export Citation

  • Calvo, Guillermo, and Pablo Guidotti, 1990, “Indexation and Maturity of Government Bonds: An Exploratory Model,” in Public Debt Management: Theory and History, ed. Rudiger Dornbusch Mario Draghi (New York: Cambridge University Press).

    • Search Google Scholar
    • Export Citation

  • Calvo, Guillermo, and Enrique G. Mendoza, 1996, “Mexico’s Balance of Payments Crisis: A Chronicle of a Death Foretold,” Journal of International Economics, Vol. 41, pp. 235–64.

    • Search Google Scholar
    • Export Citation

  • Calvo, Guillermo A., and Carmen Reinhart, 2000, “Fixing for Your Life,” in Brookings Trade Forum 2000, ed. Collins Susan Dani Rodrik (Washington: Brookings Institution).

    • Search Google Scholar
    • Export Citation

  • Caprio, Gerard, and Daniela Klingebiel, 1996, “Bank Insolvencies: Cross Country Experience,” Policy Research Paper No. 1620 (Washington: World Bank).

    • Search Google Scholar
    • Export Citation

  • Caprio, Gerard, and Daniela Klingebiel, 1999, “Episodes of Systemic and Borderline Financial Crisis” (unpublished; Washington: World Bank).

    • Search Google Scholar
    • Export Citation

  • Caramazza, Francesco, Luca Ricci, and Ranil Salgado, 2000, “Trade and Financial Contagion in Currency Crises,” IMF Working Paper No. 00/55 (Washington: International Monetary Fund).

    • Search Google Scholar
    • Export Citation

  • Chang, Roberto, and Andres Velasco, 1999, “Liquidity Crises in Emerging Markets: Theory and Policy,” NBER Macroeconomics Manual, ed. Ben Bernanke Julio Rotemberg (Cambridge, Massachusetts: MIT Press).

    • Search Google Scholar
    • Export Citation

  • Choueiri, Nada, and Graciela Kaminsky, 1999, “Has the Nature of Crises Changed? A Quarter Century of Currency Crises in Argentina,” IMF Working Paper No. 99/152 (Washington: International Monetary Fund).

    • Search Google Scholar
    • Export Citation

  • Cohen, Daniel, 1997, “Growth and External Debt: A New Perspective on the African and Latin American Tragedies,” CEPR Discussion Paper No. 1753 (London: Centre for Economic Policy Research).

    • Search Google Scholar
    • Export Citation

  • Cole, Harold, and Timothy Kehoe, 1996, “A Self-Fulfilling Model of Mexico’s 1994–95 Debt Crisis,” Journal of International Economics, Vol. 41 (November), pp. 309–30.

    • Search Google Scholar
    • Export Citation

  • Cole, Harold, and Timothy Kehoe, 2000, “Self-Fulfilling Debt Crises,” Review of Economic Studies, Vol. 67 (January), pp. 91–116.

  • Corsetti, Giancarlo, Paulo Pesenti, and Nouriel Roubini, 1999, “Paper Tigers? A Model of the Asian Crisis,” European Economic Review, Vol. 43 (June), pp. 1211–36.

    • Search Google Scholar
    • Export Citation

  • Corsetti, Giancarlo, and Bartosz Mackowiak, 2001, “Nominal Debt and the Dynamics of Currency Crises,” CEPR Discussion Paper No. 2929 (London: Centre for Economic Policy Research).

    • Search Google Scholar
    • Export Citation

  • Demirgüç-Kunt, Asli, and Enrica Detragiache, 1998, “The Determinants of Banking Crises in Developing and Developed Countries,” IMF Staff Papers, Vol. 45 (March), pp. 81–109.

    • Search Google Scholar
    • Export Citation

  • Detragiache, Enrica, 1996, “Rational Liquidity Crises in the Sovereign Debt Market: In Search of a Theory,” IMF Staff Papers, Vol. 43 (September), pp. 545–70.

    • Search Google Scholar
    • Export Citation

  • Detragiache, Enrica, and Antonio Spilimbergo, 2001, “Crises and Liquidity: Evidence and Interpretation,” IMF Working Paper No. 01/2 (Washington: International Monetary Fund).

    • Search Google Scholar
    • Export Citation

  • Diamond, Douglas, and Philip Dybvig, 1983, “Bank Runs, Deposit Insurance, and Liquidity,” Journal of Political Economy, Vol. 91 (June), pp. 401–19.

    • Search Google Scholar
    • Export Citation

  • Dooley, Michael, 1998, “A Model of Crises in Emerging Markets,” International Finance Discussion Paper No. 630 (Washington: Board of Governors of the Federal Reserve System).

    • Search Google Scholar
    • Export Citation

  • Dornbusch, Rudiger, 2001, “A Primer on Emerging Market Crises,” NBER Working Paper No. 8326 (Cambridge, Massachusetts: National Bureau of Economic Research).

    • Search Google Scholar
    • Export Citation

  • Dornbusch, Rudiger, Ilan Goldfajn, and Rodrigo O. Valdes, 1995, “Currency Crises and Collapses,” Brookings Papers on Economic Activity: 2, Brookings Institution, pp. 219–93.

    • Search Google Scholar
    • Export Citation

  • Edwards, Sebastian, 1997, “The Mexican Peso Crisis: How Much Did We Know? When Did We Know It?” NBER Working Paper No. 6334 (Cambridge, Massachusetts: National Bureau of Economic Research).

    • Search Google Scholar
    • Export Citation

  • Edwards, Sebastian, Julio Santaella, 1992, “Devaluation Controversies in the Developing Countries: Lessons from the Bretton Woods Era,” NBER Working Paper No. 4047 (Cambridge, Massachusetts: National Bureau of Economic Research).

    • Search Google Scholar
    • Export Citation

  • Eichengreen, Barry, and Carlos Arteta, 2000, “Banking Crises in Emerging Markets: Presumptions and Evidence,” CIDER Working Paper No. C00–115 (Berkeley, California: Center for International and Development Economics Research, University of California).

    • Search Google Scholar
    • Export Citation

  • Eichengreen, Barry, and Ricardo Hausmann, 1999, “Exchange Rates and Economic Recovery in the 1930’s,” Journal of Economic History, Vol. 45, No. 4, pp. 925–46.

    • Search Google Scholar
    • Export Citation

  • Eichengreen, Barry, and Andrew K. Rose, 1998, “Staying Afloat When the Wind Shifts: External Factors and Emerging Market Banking Crises,” NBER Working Paper No. 6370 (Cambridge, Massachusetts: National Bureau of Economic Research).

    • Search Google Scholar
    • Export Citation

  • Eichengreen, Barry, Andrew K. Rose, and Charles Wyplosz, 1995, “Exchange Market Mayhem: The Antecedents and Aftermath of Speculative Attacks,” Economic Policy: A European Forum, No. 21 (October), pp. 249–312.

    • Search Google Scholar
    • Export Citation

  • Eichengreen, Barry, Andrew K. Rose, and Charles Wyplosz, 1996, “Contagious Currency Crises,” NBER Working Paper No. 5681 (Cambridge, Massachusetts: National Bureau of Economic Research).

    • Search Google Scholar
    • Export Citation

  • Enoch, Charles, Anne-Marie Guide, and Daniel Hardy, 2002, “Banking Crises and Bank Resolution: Experiences in Some Transition Countries,” IMF Working Paper No. 02/56 (Washington: International Montetary Fund).

    • Search Google Scholar
    • Export Citation

  • Fama, E. F., L. Fisher, M. Jensen, and R. Roll, 1969, “The Adjustment of Stock Prices to New Information,” International Economic Review, Vol. 10 (February), pp. 1–21.

    • Search Google Scholar
    • Export Citation

  • Feldstein, Martin, 2002, “Economic and Financial Crises in Emerging Market Economies: Overview of Prevention and Management,” NBER Working Paper No. 8837 (Cambridge, Massachusetts: National Bureau of Economic Research).

    • Search Google Scholar
    • Export Citation

  • Frankel, Jeffrey, and Andrew Rose, 1996, “Currency Crashes in Emerging Markets: An Empirical Treatment,” Journal of International Economics, Vol. 41 (November), pp. 351–66.

    • Search Google Scholar
    • Export Citation

  • Furman, Jason, Joseph Stiglitz, 1998, “Economic Crises: Evidence and Insights from East Asia,” Brookings Papers on Economic Activity: 2, Brookings Institution, pp. 1–135.

    • Search Google Scholar
    • Export Citation

  • Garcia-Herrero, Alicia, 1997, “Banking Crisis in Latin America in the 1990s: Lessons from Argentina, Paraguay, and Venezuela,” IMF Working Paper No. 97/140 (Washington: International Monetary Fund).

    • Search Google Scholar
    • Export Citation

  • Gavin, Michael, and Ricardo Hausmann, 1999, “Preventing Crisis and Contagion: Fiscal and Financial Dimensions,” Inter-American Development Bank, Office of the Chief Economist, Working Paper Series (International), No. 401 (Washington).

    • Search Google Scholar
    • Export Citation

  • Ghosh, Atish, Timothy Lane, Marianne Schulze-Ghattas, AleŠ Bulíř, Javier Hamann, and Alex Mourmouras, 2002, IMF-Supported Programs in Capital Account Crises: Design and Experience, IMF Occasional Paper No. 210 (Washington: International Monetary Fund).

    • Search Google Scholar
    • Export Citation

  • Ghosh, Swati, and Atish Ghosh, 2002, “Structural Vulnerabilities and Currency Crises,” IMF Working Paper No. 02/9 (Washington: International Monetary Fund).

    • Search Google Scholar
    • Export Citation

  • Gil-Diaz, Francisco, and Augustin Carstens, 1996a, “One Year of Solitude: Some Pilgrim Tales About Mexico’s 1994–1995 Crisis,” American Economic Review, Papers and Proceedings, Vol. 86, No. 2 (May), pp. 164–69.

    • Search Google Scholar
    • Export Citation

  • Gil-Diaz, Francisco, and Augustin Carstens, 1996b, “Some Hypotheses Related to the Mexican 1994–1995 Crisis,” Banco de México, Research Paper No. 9601 (Mexico, D.F.).

    • Search Google Scholar
    • Export Citation

  • Girton, Lance, and Don Roper, 1976, “Monetary Model of Exchange Market Pressure Applied to the Post-War Canadian Experience,” International Finance Discussion Paper No. 92 (Washington: Board of Governors of the Federal Reserve System).

    • Search Google Scholar
    • Export Citation

  • Glick, Reuven, Ramon Moreno, and Mark Spiegel, 2001, Financial Crises in Emerging Markets (Cambridge, England: Cambridge University Press).

    • Search Google Scholar
    • Export Citation

  • Glick, Reuven, and Andrew Rose, 1998, “Contagion and Trade: Why Are Currency Crises Regional?” NBER Working Paper No. 6806 (Cambridge, Massachusetts: National Bureau of Economic Research).

    • Search Google Scholar
    • Export Citation

  • Goldfajn, Ilan, and Rodrigo Valdes, 1998, “Are Currency Crises Predictible?” European Economic Review, Vol. 42 (May), pp. 873–85.

  • Goldstein, Morris, Graciela Kaminsky, and Carmen Reinhart, 2000, Assessing Financial Vulnerability: An Early Warning System for Emerging Markets (Washington: Institute for International Economics).

    • Search Google Scholar
    • Export Citation

  • Green, David Jay, and J. Edgardo Campos, 2001, “Fiscal Lessons from the East Asian Financial Crisis,” Journal of Asian Economics, Vol. 12, No. 3 (Fall), pp. 309–29.

    • Search Google Scholar
    • Export Citation

  • Gupta, Poonam, Deepak Mishra, and Ratna Sahay, 2003, “Output Response to Currency Crises,” forthcoming IMF Working Paper (Washington: International Monetary Fund).

    • Search Google Scholar
    • Export Citation

  • Hausmann, Ricardo, 2002, “Unrewarded Good Fiscal Behavior: The Role of Debt Structure,” paper presented at IMF/World Bank Conference on “Rules-Based Fiscal Policy in Emerging Market Economies” (Oaxaca, Mexico).

    • Search Google Scholar
    • Export Citation

  • Hemming, Richard, and Murray Petrie, 2002, “A Framework for Assessing Fiscal Vulnerability,” in Government at Risk: Contingent Liabilities and Fiscal Risk, ed. Hana Polackova Brixi Allen Schick (Washington: World Bank).

    • Search Google Scholar
    • Export Citation

  • Hutchison, Michael, and Kathleen McDill, 1999, “Are All Banking Crises Alike? The Japanese Experience in International Comparison,” Journal of the Japanese and International Economies, Vol. 13, No. 3, pp. 155–80.

    • Search Google Scholar
    • Export Citation

  • International Monetary Fund, 1998, World Economic Outlook, May 1998: A Survey by the Staff of the International Monetary Fund, World Economic and Financial Surveys (Washington).

    • Search Google Scholar
    • Export Citation

  • International Monetary Fund, 2002a, Global Financial Stability Report: Market Developments and Issues, World Economic and Financial Surveys (Washington, March).

    • Search Google Scholar
    • Export Citation

  • International Monetary Fund, 2002b, World Economic Outlook, April 2002: A Survey by the Staff of the International Monetary Fund, World Economic and Financial Surveys (Washington).

    • Search Google Scholar
    • Export Citation

  • International Monetary Fund, 2002c, “Data Provision to the Fund for Surveillance Purposes.”? Available on the Internet at http://www.imf.org/external/np/sta/data/prov/2002/042602.htm

    • Search Google Scholar
    • Export Citation

  • Jeanne, Olivier, 2000, “Debt Maturity and the Global Financial Architecture,” CEPR Discussion Paper No. 2520 (London: Centre for Economic Policy Research).

    • Search Google Scholar
    • Export Citation

  • Kalter, Eliot, and Armando Ribas, 1999, “The 1994 Mexican Economic Crisis: The Role of Government Expenditure and Relative Prices,” IMF Working Paper No. 99/160 (Washington: International Montetary Fund).

    • Search Google Scholar
    • Export Citation

  • Kamin, Steven, and Oliver Babson, 1999, “The Contributions of Domestic and External Factors to Latin American Devaluation Crisis: An Early Warning Systems Approach,” International Finance Discussion Paper No. 645 (Washington: Board of Governors of the Federal Reserve System).

    • Search Google Scholar
    • Export Citation

  • Kaminsky, Graciela, 1998, “Currency and Banking Crises: The Early Warnings of Distress,” International Finance Discussion Paper No. 629 (Washington: Board of Governors of the Federal Reserve System).

    • Search Google Scholar
    • Export Citation

  • Kaminsky, Graciela, Saul Lizondo, and Carmen Reinhart, 1998, “Leading Indicators of Currency Crises,” Staff Papers, International Monetary Fund, Vol. 45, No. 1 (March), pp. 1–48.

    • Search Google Scholar
    • Export Citation

  • Kaminsky, Graciela, and Carmen Reinhart, 1999, “The Twin Crises: The Causes of Banking and Balance of Payment Problems,” American Economic Review, Vol. 89 (June), pp. 473–500.

    • Search Google Scholar
    • Export Citation

  • Kharas, Homi, and Deepak Mishra, 2001, “Fiscal Policy, Hidden Deficits and Currency Crises,” in World Bank Economists’ Forum, ed. S. Devarajan, F. H. Rogers, L. Squire (Washington: World Bank).

    • Search Google Scholar
    • Export Citation

  • Kopits, George, 2000, “How Can Fiscal Policy Help Avert Currency Crises?” IMF Working Paper No. 00/185 (Washington: International Montetary Fund).

    • Search Google Scholar
    • Export Citation

  • Krugman, Paul, 1979, “A Model of Balance of Payments Crises,” Journal of Money, Credit and Banking, Vol. 11, pp. 311–25.

  • Krugman, Paul, 1985, “International Debt Strategies in an Uncertain World,” in International Debt and the Developing Countries, ed. Gordon Smith John Cuddington (Washington: World Bank).

    • Search Google Scholar
    • Export Citation

  • Krugman, Paul, 1999, “Balance Sheets, the Transfer Problem, and Financial Crises,” in International Finance and Financial Crises: Essays in Honor of Robert P. Flood, Jr., ed. Peter Isard, Assaf Razin, Andrew Rose (Boston: Kluwer Academic Press; Washington: International Monetary Fund).

    • Search Google Scholar
    • Export Citation

  • Kumar, Manhoman, Uma Moorthy, and William Perraudin, 2002, “Predicting Emerging Market Currency Crashes,” IMF Working Paper No. 02/7 (Washington: International Monetary Fund).

    • Search Google Scholar
    • Export Citation

  • Porta, La Rafael, Florencio Lopez-de-Silanes, and Andrei Shleifer, 2000, “Government Ownership of Banks,” NBER Working Paper No. 7620 (Cambridge, Massachusetts: National Bureau of Economic Research).

    • Search Google Scholar
    • Export Citation

  • Lindgren, Carl-Johan, Gillian Garcia, and Matthew Saal, 1996, Bank Soundness and Macroeconomic Policy (Washington: International Monetary Fund).

    • Search Google Scholar
    • Export Citation

  • McKinnon, Ronald, 1991, The Order of Economic Liberalization: Financial Control in the Transition to a Market Economy (Baltimore, Maryland: Johns Hopkins University Press).

    • Search Google Scholar
    • Export Citation

  • Milesi-Ferretti, Gian Maria, and Assaf Razin, 1996, “Current-Account Sustainability,” Princeton Studies in International Finance No. 81 (Princeton, New Jersey: Department of Economics, Princeton University).

    • Search Google Scholar
    • Export Citation

  • Milesi-Ferretti, Gian Maria, and Assaf Razin, 2000, “Current Account Reversals and Currency Crises: Empirical Regularities,” in Currency Crises, ed. Paul Krugman (Chicago: University of Chicago Press).

    • Search Google Scholar
    • Export Citation

  • Moreno, Ramon, 1995, “Macroeconomic Behavior During Periods of Speculative Pressure or Realignment: Evidence from Pacific Basin Economies,” Federal Reserve Bank of San Francisco Economic Review, No. 3, pp. 3–16.

    • Search Google Scholar
    • Export Citation

  • Nitithanprapas, Ekniti, and Thomas Willett, 2000 “A Currency Crises Model That Works: A Payments Disequilibrium Approach,” Claremont Working Paper No. 2000–25 (Claremont, California: Claremont University).

    • Search Google Scholar
    • Export Citation

  • Obstfeld, Maurice, 1994, “The Logic of Currency Crises,” Cahiers Economiques et Monetaires Vol. 43, pp. 189–213.

  • Osband, Kent, and Caroline Van Rijckeghem, 2000, “Safety from Currency Crashes,” IMF Staff Papers, Vol. 47 (May), pp. 238–58.

  • Ötker, Ĭnci, and Ceyla Pazarbaşioğlu, 1995, “Speculative Attacks and Currency Crises: The Mexican Experience,” IMF Working Paper No. 95/112 (Washington: International Monetary Fund).

    • Search Google Scholar
    • Export Citation

  • Purcell, John, and Jeffrey Kaufman, 1993, The Risks of Sovereign Lending: Lessons from History (New York: Saloman Brothers).

  • Radelet, Steven, and Jeffrey Sachs, 1998, “The East Asian Financial Crisis: Diagnosis, Remedies, Prospects,” Brookings Papers on Economic Activity: 1, Brookings Institution, pp. 1–90.

    • Search Google Scholar
    • Export Citation

  • Reinhart, Carmen, 2002, “Default, Currency Crises and Sovereign Credit Ratings,” NBER Working Paper No. 8738 (Cambridge, Massachusetts: National Bureau of Economic Research).

    • Search Google Scholar
    • Export Citation

  • Rodrik, Dani, and Andres Velasco, 1999, “Short-Term Capital Flows,” NBER Working Paper No. 7364 (Cambridge, Massachusetts: National Bureau of Economic Research).

    • Search Google Scholar
    • Export Citation

  • Sachs, Jeffrey, Aaron Tornell, and Andres Velasco, 1996, “Financial Crises in Emerging Markets: The Lessons from 1995,” Brookings Papers on Economic Activity: 1, Brookings Institution, pp. 147–215.

    • Search Google Scholar
    • Export Citation

  • Stone, Mark, and Melvyn Weeks, 2001, “Systemic Financial Crises, Balance Sheets, and Model Uncertainty,” IMF Working Paper No. 01/162 (Washington: International Monetary Fund).

    • Search Google Scholar
    • Export Citation

  • Tornell, Aaron, 1999, “Common Fundamentals in the Tequila and Asian Crises,” NBER Working Paper No. 7139 (Cambridge, Massachusetts: National Bureau of Economic Research).

    • Search Google Scholar
    • Export Citation

  • Velasco, Andres, 1987, “Financial Crises and Balance of Payments Crises: A Simple Model of the Southern Cone Experience,” Journal of Development Economics, Vol. 27 (October), pp. 263–83.

    • Search Google Scholar
    • Export Citation

  • World Bank, 2000, Global Economic Prospects and the Developing Countries 2000 (Washington).