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Empirical Links between Twin Crises in the 1980s and the 1990s: Were there Differences?

  • Jürgen von Hagen
  • Tai-kuang Ho
Chapter

Abstract

This article examines the empirics of twin crises for a sample of 33 developing countries. We use the same methodology to identify currency and banking crises. We find that twin crises in the 1980s tended to show up as a currency crisis followed by a banking crisis. This pattern changes in the 1990s with twin crises showing up as a banking crisis followed by a currency crisis. Currency crises in the 1990s are strongly correlated with high M2 to foreign reserves ratio. Banking crises in the 1990s are more likely associated with a boom and bust cycle in credit growth.

Keywords

Real Exchange Rate Nominal Interest Rate Currency Crisis Banking Crisis Foreign Reserve 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Copyright information

© Springer-Verlag Berlin Heidelberg 2004

Authors and Affiliations

  • Jürgen von Hagen
    • 1
  • Tai-kuang Ho
    • 2
  1. 1.Center for European Integration Studies (ZEI B)BonnGermany
  2. 2.Graduate Institute of International EconomicsNational Chung Cheng UniversityTaiwan

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