Currency crises in EU candidate countries: An early warning system approach
The purpose of this paper is to develop an econometric model of early warning system (EWS) for predicting currency crises in EU candidate countries. Using actual quarterly panel data for three EU candidate countries (Croatia, Macedonia and Turkey) in the period January 2005 - June 2010, we...
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| Format: | Article |
| Language: | English |
| Published: |
Economists' Association of Vojvodina
2015-01-01
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| Series: | Panoeconomicus |
| Subjects: | |
| Online Access: | http://www.doiserbia.nb.rs/img/doi/1452-595X/2015/1452-595X1504493B.pdf |
| _version_ | 1818331360401555456 |
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| author | Bucevska Vesna |
| author_facet | Bucevska Vesna |
| author_sort | Bucevska Vesna |
| collection | DOAJ |
| description | The purpose of this paper is to develop an econometric model of early warning
system (EWS) for predicting currency crises in EU candidate countries. Using
actual quarterly panel data for three EU candidate countries (Croatia,
Macedonia and Turkey) in the period January 2005 - June 2010, we estimate a
binomial logit model, which accurately predicts potential episodes of
outbreak of currency crisis. In addition, we find that real GDP growth rate,
participation in an IMF loan program, current account and fiscal balance and
short-term external indebtedness are the most significant common predictors
of currency crises across EU candidate countries. These results imply
implementing policy measures aimed at raising the growth potential of the
domestic economies of EU candidate countries, monitoring their short-term
external indebtedness, improving their external competitiveness, cutting
public spending and increasing the confidence of residents and non-residents
in their domestic banking sectors. |
| first_indexed | 2024-12-13T13:18:37Z |
| format | Article |
| id | doaj.art-bf750a1dec024abda71523e908330eea |
| institution | Directory Open Access Journal |
| issn | 1452-595X 2217-2386 |
| language | English |
| last_indexed | 2024-12-13T13:18:37Z |
| publishDate | 2015-01-01 |
| publisher | Economists' Association of Vojvodina |
| record_format | Article |
| series | Panoeconomicus |
| spelling | doaj.art-bf750a1dec024abda71523e908330eea2022-12-21T23:44:27ZengEconomists' Association of VojvodinaPanoeconomicus1452-595X2217-23862015-01-0162449351010.2298/PAN1504493B1452-595X1504493BCurrency crises in EU candidate countries: An early warning system approachBucevska Vesna0Ss. Cyril and Methodius University, Faculty of Economics, Skopje, MacedoniaThe purpose of this paper is to develop an econometric model of early warning system (EWS) for predicting currency crises in EU candidate countries. Using actual quarterly panel data for three EU candidate countries (Croatia, Macedonia and Turkey) in the period January 2005 - June 2010, we estimate a binomial logit model, which accurately predicts potential episodes of outbreak of currency crisis. In addition, we find that real GDP growth rate, participation in an IMF loan program, current account and fiscal balance and short-term external indebtedness are the most significant common predictors of currency crises across EU candidate countries. These results imply implementing policy measures aimed at raising the growth potential of the domestic economies of EU candidate countries, monitoring their short-term external indebtedness, improving their external competitiveness, cutting public spending and increasing the confidence of residents and non-residents in their domestic banking sectors.http://www.doiserbia.nb.rs/img/doi/1452-595X/2015/1452-595X1504493B.pdfcurrency crisesearly warning systemEU candidate countrieslogit modelprediction |
| spellingShingle | Bucevska Vesna Currency crises in EU candidate countries: An early warning system approach Panoeconomicus currency crises early warning system EU candidate countries logit model prediction |
| title | Currency crises in EU candidate countries: An early warning system approach |
| title_full | Currency crises in EU candidate countries: An early warning system approach |
| title_fullStr | Currency crises in EU candidate countries: An early warning system approach |
| title_full_unstemmed | Currency crises in EU candidate countries: An early warning system approach |
| title_short | Currency crises in EU candidate countries: An early warning system approach |
| title_sort | currency crises in eu candidate countries an early warning system approach |
| topic | currency crises early warning system EU candidate countries logit model prediction |
| url | http://www.doiserbia.nb.rs/img/doi/1452-595X/2015/1452-595X1504493B.pdf |
| work_keys_str_mv | AT bucevskavesna currencycrisesineucandidatecountriesanearlywarningsystemapproach |