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Mis-Leading Indicators? The Argentinean Currency Crisis

Discussion Papers 327, 24 S.

Patricia Alvarez-Plata, Mechthild Schrooten

2003. Feb.

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Published in: Journal of Policy Modeling 26 (2004), 5, 587-603


Despite the fact that Argentina has been suffering from recession for years the timing and severity of the recent currency crisis has surprised most observers. This paper analyzes whether the "early warning" or "signals" approach of Kaminsky (1998), Kaminsky/Lizondo/Reinhart (1998) and Kaminsky/Reinhart (1999) could have predicted the Argentinean currency crisis at an earlier point in time. Using a broad set of indicators, it is shown that the forecasting quality of this approach was poor in the case of Argentina.

JEL-Classification: F31;F47
Keywords: Currency Crisis, Early Warning Systems
Frei zugängliche Version: (econstor)