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Structural Vulnerabilities and Currency Crises Swati R. Ghosh And Atish R. Ghosh Full Text of this Article (PDF 148K) 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. |
