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Towards A New Set Of Leading Indicators Of Currency Crisis For Developing Countries: An Application To Argentina

Author

Listed:
  • Federico Marongiu

    (Universidad de Buenos Aires)

Abstract
Currency and financial crises are determinants of growth and development, mainly in developing countries subject to shocks, contagion and volatility. A relevant issue when trying to do the implementation of development policies is to anticipate or forecast the occurrence of currency crises that could turn good ideas into failure. This type of crises have strong negative economic, social and political consequences. This paper takes a look in the leading indicators literature and shows that this approach failed in predicting the Argentinean collapse of 2001-2002. We also show that particular features of the Argentinean economy needed of different indicators to forecast the collapse of the currency board system. The paper also developes some new indicators to include in an Early Warning System that can take on account specific features of Argentina´s economy. This indicators can be integrated into a wider set in order to be a useful tool for policymakers and authorities in Argentina and in other developing countries in the planification and implementation of development policies and programs.

Suggested Citation

  • Federico Marongiu, 2005. "Towards A New Set Of Leading Indicators Of Currency Crisis For Developing Countries: An Application To Argentina," Public Economics 0512011, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwppe:0512011
    Note: Type of Document - pdf; pages: 37
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    File URL: https://econwpa.ub.uni-muenchen.de/econ-wp/pe/papers/0512/0512011.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    currency crisis - exchange rate - leading indicators - Argentina;

    JEL classification:

    • D6 - Microeconomics - - Welfare Economics
    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • H - Public Economics

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