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- Title
Empirical Indicators of Currency Crises in East Asia.
- Authors
Wirjanto, Tony S.
- Abstract
The paper is concerned with identifying useful indicators of the probability of currency crises in Indonesia, Malaysia, the Philippines, South Korea and Thailand over a period of 22 years, where a currency crisis is defined as a large and infrequent devaluation of a local currency. The leading crisis indicators include international and domestic factors; but they are dominated by the leading indicators from the financial sector, such as the ratio of short-term debt to foreign reserves, the ratio of M2 to foreign reserves, and the indicator representing a regional contagion effect. This result is interpreted as pointing to external illiquidity together with adverse shifts in the market sentiment as the likely catalyst for the 1997-98 East Asia crisis.
- Subjects
EAST Asia; DEVALUATION of currency; FINANCIAL crises; ECONOMIC indicators; ECONOMIC conditions in East Asia
- Publication
Pacific Economic Review, 1999, Vol 4, Issue 2, p165
- ISSN
1361-374X
- Publication type
Article
- DOI
10.1111/1468-0106.00070