Explaination an Early Warning System for Identification of the Financial Crisis in Iran (in Persian)

Ezatollah Sayadnia Tayebi (), Houshang Shajari (), Saeid Samadi and Ali Arshadi ()
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Ezatollah Sayadnia Tayebi: Iran
Houshang Shajari: Iran
Saeid Samadi: Iran
Ali Arshadi: Iran

Journal of Monetary and Banking Research (فصلنامه پژوهش‌های پولی-بانکی), 2011, vol. 2, issue 6, 169-212

Abstract: There are various theories about the crisis. These include theories of Marx¡ Keynes's theory of market failure¡ Austrian school. They confirmed that the existence of crisis in the capitalist system and consider it as a part of the capitalist system. The economists have tried to explain and design a system that before the crisis happen¡ policy makers should be aware of it possibility and crisis prevention policies should be implemented to prevent it. Therefore¡ this paper study an early warning system for identification of the financial crises (banking and currency). It would explained. the probability of future crisis¡ and an early warning system be able to send a signal before it happens. The first warning indicators¡ including GDP growth¡ inflation¡ real interest rate¡ stock price index¡ effective exchange rate and diversion of formal and informal exchange rate¡ the ratio of foreign debt to foreign asset¡ the ratio of current account to GDP are selected by the signal approach and then these variables are measured by the logit model and neural network. Therefore¡ according to our estimates¡ the years of 1980¡ 1987¡ 1994¡ 1995 are selected as the crises years in Iran's economy. indicators such as GDP growth¡ real interest rates¡ inflation and exchange rate deviation are identified as early warning indicators. JEL Classification: G10, C25, F47, E58

Keywords: Financial Crisis; Early Warning System (search for similar items in EconPapers)
Date: 2011
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