Structural Vulnerabilities and Currency Crises

Swart Ghosh and Atish Ghosh ()

No 2002/009, IMF Working Papers from International Monetary Fund

Abstract: This paper examines the role of structural factors—governance and rule of law, corporate sector governance (creditor rights and shareholder rights), corporate financing structure—as well as macroeconomic variables in currency crises. Using a technique known as a binary recursive tree allows for interactions between the various explanatory variables. It is found that structural vulnerabilities play an important role in the occurrence of “deep” currency crises (those with a real GDP growth decline of at least 3 percentage points) and that there are complex interactions between these structural vulnerabilities and macroeconomic imbalances.

Keywords: WP; currency crisis; crisis country; debt-equity ratio; current account deficit; short-term debt; Currency crises; structural indicators; corporate governance; binary recursive trees; balance of payments crisis; crisis definition; cash flow; creditor right; crisis case; BOP crisis; countries in the sense; governance index; probability of a crisis; country surveillance work; Current account deficits; Current account balance; Public sector; East Asia (search for similar items in EconPapers)
Pages: 31
Date: 2002-01-01
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Citations: View citations in EconPapers (29)

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Journal Article: Structural Vulnerabilities and Currency Crises (2003)
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