The contribution of domestic and external factors to emerging market devaluation crises: an early warning systems approach

Steven B. Kamin, Shawna L. Samuel and John W. Schindler

No 711, International Finance Discussion Papers from Board of Governors of the Federal Reserve System (U.S.)

Abstract: This paper uses Bayesian techniques to compare three definitions of optimality for the basic job search model: the standard income-maximizing definition, an approximation to the standard definition, and a simple alternative. The important role of prior choice in these comparisons is illustrated. Using natural conjugate priors to represent hypothetical samples of data, we find that the simple alternative is preferred to the standard definition of optimality. However, using priors constructed from findings in the literature, we are able to find some evidence in favor of the standard definition of optimality.

Keywords: Developing countries; Financial crises; Econometric models (search for similar items in EconPapers)
Date: 2001
New Economics Papers: this item is included in nep-ifn
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Citations: View citations in EconPapers (31)

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