Determinants of Currency Crises: A Conflict of Generations?

Jesus Crespo Cuaresma and Tomáš Slacík ()
Additional contact information
Tomáš Slacík: Oesterreichische Nationalbank, Foreign Research Division

Focus on European Economic Integration, 2008, issue 1, 126-141

Abstract: Crespo Cuaresma and Slacík (2007) show that macroeconomic fundamentals are rather fragile determinants of currency crises under model uncertainty. The objective of the present follow-up study is to search for empirical support for the first- and second-generation models of currency crises in emerging economies using a larger dataset that includes crisis episodes of the 1980s and 1990s, while explicitly taking into account model uncertainty in a Bayesian manner. In line with the propositions made in the theoretical literature, our results suggest that crisis episodes in the 1980s were driven predominantly by adverse developments of macroeconomic fundamentals, while the results for crises in the 1990s might well be interpreted as empirical support for the second-generation type of crises. In addition, our estimation results stand in contradiction to the popular bipolar view and suggest that de facto intermediate exchange rate arrangements considerably reduce the risk of a speculative currency attack.

Date: 2008
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
https://www.oenb.at/dam/jcr:c94146f6-e598-40ba-800 ... esma_tcm16-86737.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:onb:oenbfi:y:2008:i:1:b:5

Ordering information: This journal article can be ordered from
Oesterreichische Nationalbank, Documentation Management and Communications Services, Otto-Wagner Platz 3, A-1090 Vienna, Austria

Access Statistics for this article

Focus on European Economic Integration is currently edited by Julia Wörz and Elisabeth Beckmann

More articles in Focus on European Economic Integration from Oesterreichische Nationalbank (Austrian Central Bank) P.O. Box 61, A-1011 Vienna, Austria. Contact information at EDIRC.
Bibliographic data for series maintained by Elisabeth Beckmann ().