Currency crises in Turkey: An empirical assessment
Ali Ari () and
Research in International Business and Finance, 2018, vol. 46, issue C, 281-293
Contrary to many previous empirical studies on currency crises, this paper aims to test the relevance of different methodologies and crisis definitions in estimating crisis determinants and predicting crisis episodes in the case of Turkey over the period of 1990–2014. Empirical results first show that the inflation rate, portfolio investments, and the ratio of bank foreign deposits to total deposits are found to be the leading determinants of Turkish currency crises in different model estimations. Secondly, empirical findings clearly indicate the superiority of the Markov approach in predicting crisis episodes in Turkey when compared to the logit model.
Keywords: Currency crises; Early warning systems; Logit; Markov-switching; Turkey (search for similar items in EconPapers)
JEL-codes: C53 C58 G01 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:riibaf:v:46:y:2018:i:c:p:281-293
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