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The study of contagious paces of financial crises

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  • Jo-Hui Chen
  • Chih-Sean Chen

Abstract

This study deals with the emergence of different regional crises and the comparison of early warning indicators to check for the accuracy of pace of exits. It was found that trade factors and monetary conditions clearly play a pivotal role in affecting the probability of existing time to currency crisis episodes and on the recurrence of crises. More specifically, using the index of market pressure methods, it is likely that the Asian Financial Crisis and the Mexico Tequila Crisis, when compared with the European Exchange Rate Mechanism (ERM) Crisis, were preceded by different spreads accelerating across those countries. The evidence suggests that efficient early warning indicators may exist and may be identified depending on the methods applied to the pace of exit involved. Copyright Springer Science+Business Media B.V. 2012

Suggested Citation

  • Jo-Hui Chen & Chih-Sean Chen, 2012. "The study of contagious paces of financial crises," Quality & Quantity: International Journal of Methodology, Springer, vol. 46(6), pages 1825-1846, October.
    • Handle: RePEc:spr:qualqt:v:46:y:2012:i:6:p:1825-1846
    DOI: 10.1007/s11135-011-9560-8
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