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Title: Currency Crises in EU Candidate Countries: An Early Warning System Approach
Authors: Bucevska, Vesna 
Keywords: Currency crises, Early warning system, EU candidate countries, Logit model, Prediction
Issue Date: Sep-2015
Publisher: Savez ekonomista Vojvodine, Novi Sad, Serbia
Source: Vesna Bucevska, 2015. "Currency Crises in EU Candidate Countries: An Early Warning System Approach," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 62(4), pages 493-510, September.
Journal: Panoeconomicus
Abstract: 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.
Appears in Collections:Faculty of Economics 03: Journal Articles / Статии во научни списанија

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