Predicting Currency Crises, the Ultimate Significance of Macroeconomic Fundamentals in Linear Specifications with Nonlinear Extensions

Sasin, Marcin

doi:10.2139/ssrn.1440222

Cited by 12 publications

(4 citation statements)

References 43 publications

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“…the transition from an old (long-run) sustainable current account to a new one. In fact, Sasin (2001) stated that long-run sustainability ratios computed using a theoretical framework might be misleading and it is in fact hard to conclude whether in the short-run the current account deficit is truly excessive. Therefore, caution should be exercised with respect to the results and implications of such calculations.…”

Section: Solvency Sustainability and Excessive Current Account Imbalmentioning

confidence: 99%

Current Account Sustainability in Selected Transition Countries

Aristovnik

2006

SSRN Journal

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The article examines the question of whether the current account deficits seen in selected transition economies in recent years mainly as a symptom of the dynamic economic activity of the catching-up process are a source of potential macroeconomic destabilisation. Given the possible significant reduction of capital flows, as well as restrictions and lessons from recent financial crises, current account deficits must be closely monitored in the region. In this respect, the issue of 'current account sustainability' in seventeen transition economies is investigated. For this purpose, two accounting frameworks (Milesi-Ferreti and Razin, 1996; Reisen, 1998) based on certain strict assumptions are employed. The results show that if the observed level of foreign direct investment (FDI) flows is kept in the medium run almost all countries could optimally have a higher level of external deficit, with the exception of countries such as Baltic States, Hungary, Macedonia, Moldova and Romania. Accordingly, the maintenance of relatively large FDI inflows (especially greenfield investments) to national economies is a key priority in securing future external sustainability. In the end, the results indicate that current account deficits of transition economies that exceed 5 percent of GDP generally involve problems of their external sustainability.

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Section: Solvency Sustainability and Excessive Current Account Imbalmentioning

confidence: 99%

Current Account Sustainability in Selected Transition Countries

Aristovnik

2006

SSRN Journal

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“…The relationship between trade balance and crisis has a long history equal to the one of financial crisis analysis. First generation models [1] but its effect to early literature is still unclear [2] deficit as stated "may matter" or weak correlation is present [3]. The major effects of balance of payments to crisis and its aftermath analyzed more significantly at the case of Asian crisis.…”

Section: Past Workmentioning

confidence: 99%

The Culture Trade Balance during Financial Crisis the Case of Greece

Dimitrios¹

2019

SARJBM

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This work presents the relationship between the sectorial trade balance and its relationship to the financial crisis hit severe Eurozone and especially Greece. The country has a long history both on culture and economic crises introducing this term in anciency. We deployed a bunch of six explanatory variables related to the balance of payments especially on productivity and economic freedom terms as long with contagion and possible GNP spending applying the robust least squares analysis to an industry balance. The results show that the crisis in or at related countries seem to have positive effect and Productivity related variables have negative. Cultural spending on GDP share has also positive effect.

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“…As indicated by (Edwards, 2001) deficits "may matter". In a similar work (Sasin, 2001) have attempted to give interfaces between present record deficiencies and currency crises. A large portion of the studies audited don't give solid and numerous association between high current account deficit and currency crises.…”

Section: Balance Of Payments (Bop)mentioning

confidence: 99%