Development of an Early Warning Model for Currency Crises in Emerging Economies: An Empirical Study among Middle Eastern Countries

The study proposes real exchange rate, exports, imports, trade balance/gross domestic product (GDP), foreign liabilities/foreign assets, domestic real interest rate, world oil prices, and government consumption/GDP as indicators to predict currency crises in emerging economies: Egypt, Jordan, and Tu...

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Bibliographic Details
Published in:International journal of management 2006-09, Vol.23 (3), p.403
Main Author: Abumustafa, Naser I
Format: Article
Language:English
Subjects:
Banking industry
Consumption
Economic crisis
Economic development
Economic growth
Economic indicators
Economic models
Economic reform
Emerging markets
Expatriates
Exports
Fiscal policy
Foreign exchange rates
Foreign investment
GDP
Gross Domestic Product
Inflation
Interest rates
International finance
International trade
Literature reviews
Persian Gulf War
Prices
Remittances
Reserve assets
Structural adjustment
Studies
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Summary:The study proposes real exchange rate, exports, imports, trade balance/gross domestic product (GDP), foreign liabilities/foreign assets, domestic real interest rate, world oil prices, and government consumption/GDP as indicators to predict currency crises in emerging economies: Egypt, Jordan, and Turkey. We select 8 indicators from 5 different sectors: current account, fiscal sector, financial sector, world economy, and capital account. The results show that all crises were predictable. Furthermore, the study shows that Jordan could be due for another currency crisis in the near future. [PUBLICATION ABSTRACT]
ISSN:0813-0183