Currency Crises: Is Central America Different?

Gerardo Esquivel () and Felipe Larraín

CID Working Papers from Center for International Development at Harvard University

Abstract: In a recent paper we analyzed the determinants of currency crises in a sample of 30 high and middle income countries (Esquivel and Larraín, 1998). In this work we focus on Central America and analyze whether the determinants of currency crises in this region are different from those identified in our previous work. We conclude that they are not, and show that a small set of macroeconomic variables helps to explain the currency crises that took place in Central America between 1976 and 1996. The results of tests applied here support the empirical approach that attempts to explain currency crises by focusing on the behavior of a few macroeconomic indicators. Part of the interest of this result stems from the fact that the Central American countries had an exchange rate system markedly different from that prevailing in the economies that are usually analyzed in similar studies.

Keywords: Central America; exchange rate; currency crises; financial crises (search for similar items in EconPapers)
JEL-codes: F31 F33 N26 (search for similar items in EconPapers)
Date: 1999-09
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Related works:
Working Paper: Currency Crises: Is Central America Different? (2000)
Working Paper: Currency Crises: Is Central America Different? (1999)
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Persistent link: https://EconPapers.repec.org/RePEc:wop:cidhav:26

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