Structural Vulnerabilities and Currency Crises
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Summary:
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.
Series:
Working Paper No. 2002/009
Subject:
Balance of payments Corporate governance Currency crises Current account balance Current account deficits Economic sectors Financial crises Public sector
English
Publication Date:
January 1, 2002
ISBN/ISSN:
9781451842609/1018-5941
Stock No:
WPIEA0092002
Pages:
31
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