1,721,067 research outputs found
Are Currency Crises Predictable? A Test
Get PDFThis paper evaluates three models for predicting currency crises that were proposed before 1997. The idea is to answer the question: if we had been using these models in late 1996, how well armed would we have been to predict the Asian crisis? The results are mixed. Two of the models fail to provide useful forecasts. One model provides forecasts that are somewhat informative though still not reliable. Plausible modifications to this model improve its performance, providing some hope that future models may do better. This exercise suggests, though, that while forecasting models may help indicate vulnerability to crisis, the predictive power of even the best of them may be limited. Copyright 1999, International Monetary Fund
Assessing Early Warning Systems: How Have They Worked in Practice?
Get PDFSince 1999, IMF staff have been tracking several early warning system (EWS) models of currency crisis. The results have been mixed. One of the long-horizon models has performed well relative to pure guesswork and to available non-model-based forecasts, such as agency ratings and private analysts' currency crisis risk scores. The data do not speak clearly on the other long-horizon EWS model. The two short-horizon private sector models generally performed poorly. Copyright 2005, International Monetary Fund
Potential gains from capital flight repatriation for Sub-Saharan African countries
Get PDFDespite the recent increase in capital flows to Sub-Saharan Africa, the region remains largely marginalized in financial globalization and chronically dependent on official development aid. And with the potential decline in the level of official development assistance in a context of global financial crisis, the need to increase domestic resources mobilization as well as non-debt generating external resources is critical now more than ever before. However, the debate on resource mobilization has overlooked an important untapped source of funds consisting of the massive stocks of private wealth stashed in Western financial centers, a substantial part of which left the region in the form of capital flight. This paper argues that the repatriation of flight capital should take a more prominent place in this debate from a moral standpoint and for clear economic reasons. On the moral side, the argument is that a large proportion of the capital flight legitimately belongs to the Africans and therefore must be restituted to the legitimate claimants. The economic argument is that repatriation of flight capital will propel the sub-continent on a higher sustainable growth path while preserving its financial stability and without mortgaging the welfare of its future generations through external borrowing. The analysis in the paper demonstrates quantitatively that the gains from repatriation are large and dominate the expected benefits from other sources such as debt relief. It is estimated that if only a quarter of the stock of capital flight was repatriated to Sub-Saharan Africa, the region would go from trailing to leading other developing regions in terms of domestic investment, thus initiating a ‘big-push’-led sustainable long-term economic growth. The paper proposes some strategies for inducing capital flight repatriation, but cautions that the success of this program is contingent on strong political will on the part of African and Western governments and effective coordination and cooperation at the global level.Access to Finance,Economic Theory&Research,Investment and Investment Climate,Debt Markets,Emerging Markets
Beyond tariffs and quotas : why don't African manufacturers export more?
Get PDFThere has been much concern about Africa's recent export performance. Even though tariff and non-tariff barriers to trade have been falling, Africa's share of world exports has declined and most African countries remain highly dependent on a narrow range of primary commodities for export earnings. The author looks at factors that affect the export performance of manufacturing enterprises in eight African countries. In addition to enterprise characteristics (such as size, ownership, and education of the manager), policy-related variables also affect export performance. Manufacturing enterprises are less likely to export in countries with restrictive trade and customs regulation and poor customs administration. In contrast, there is less evidence that the quality of domestic transportation infrastructure has a large impact on export performance. Although the coefficient on this variable is negative, it is statistically insignificant in most model specifications.
Is East Asia Safe from Financial Crises?
Get PDFThis paper looks at the measures taken by East Asian countries since the 1997-8 crisis to reduce the odds of a new crisis. It finds that odds are low, but far from zero. Much progress has been done to deal with the vulnerabilities that have been identified so far, but some remain. The massive accumulation of foreign exchange reserves is raising the threshold at which markets would trigger speculative attacks, but the threshold is still well within reach of international markets. Efforts at building a regional defense system are slow and unlikely to come to fruition in the near future.International Economics, Exchange Rates, Currency rises, Foreign exchange reserves
Human Development in Africa
Get PDFHuman development (HD), a process designed to enhance human lives directly, is contrasted with economic development, which entails the expansion of material things intended to fulfill human needs. Human development empowers people to participate in the improvement of their own well-being. The paper looks at the record of HD in Africa over the period 1970-2005, using half-decadal data derived from United Nations sources and national statistical bureaus. It is found that over the period analyzed, the human development index improved in all African countries except in Zambia, where it declined, due to unfavorable terms of trade and to persistent health and governance problems, among challenges. Nonetheless, despite this progress, African countries continue to lag behind other regions of the world in HD. There has been little advance on the economic development front, where growth plummeted in most African countries, impoverishing nearly 50 per cent of the population. Towards the end of the 1990s, however, African economies began to recover due mainly to reforms in governance and distributive systems, and in mechanisms to protect people against downside risks, including disease pandemics, political instabilities, droughts and adverse terms of trade. The paper argues for a continuation of reforms in order to further improve economic and human development outcomes on the continent.Human development, poverty, political and economic governance, Africa
A Note on Remittances in El Salvador and Ecuador: An Analysis of Household Survey Data
Get PDFThis study analyzes the impact of remittances as seen in household survey data from three small rural communities. OLS and multivariate anova regressions were used to analyze household survey data collected in Cumbe and Gualaceo (Ecuador) and in Ciudad Romero (El Salvador). The results contradict the findings of some studies concluding that in many countries remittances acted as “compensation for poor economic performance” rather than capital promoting economic development. Ce papier a pour objectif de proposer une étude de cas sur l’impact des transferts de fonds individuels des émigrés vers leur village d’origine. L’étude repose sur des données collectées dans le cadre d’entretiens individuels réalisés dans trois villages : Cumbe et Gualaceo (Equateur) et Ciudad Romero (El Salvador). Les résultats contredisent, dans le cadre de ces villages, certaines études précédentes qui concluaient en l’absence d’impacts de long-terme des fonds transférés. En utilisant un modèle simple fondé sur la méthode des moindres carrés ordinaires complété par une analyse de variance multi-variée, cette étude montre un impact positif des transferts de fonds sur l’investissement, en plus d’être un soutien financier pour les produits de première nécessité.remittances, Latin America, development, human capital, foreign aid , transferts de fonds, Amérique latine, développement économique, capital humain, aide internationale
A Review of the Literature on Early Warning Systems for Banking Crises
Get PDFThis paper presents a review of alternative methodologies for early detection of banking distress. The methodologies proposed are aimed to the early identification of financial distress for countries without an important recent history of bank failure, but facing an unstable international environment. We evaluate several indicators and methodologies to measure financial distress such as qualitative indicators, the signal extraction approach, limited dependent estimation and finally duration models.
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