Currency Crises, Capital-Account Liberalization, and Selection Bias
Are countries with unregulated capital flows more vulnerable to currency crises? Efforts to answer this question properly must control for self-selection bias, because countries with liberalized capital accounts may also have sounder economic policies and institutions that make them less likely to experience crises. We employ a matching and propensity-score methodology to address this issue in a panel analysis of developing countries. Our results suggest that, after controlling for sample selection bias, countries with liberalized capital accounts experience a lower likelihood of currency crises. Copyright by the President and Fellows of Harvard College and the Massachusetts Institute of Technology.
Year of publication: |
2006
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Authors: | Glick, Reuven ; Guo, Xueyan ; Hutchison, Michael |
Published in: |
The Review of Economics and Statistics. - MIT Press. - Vol. 88.2006, 4, p. 698-714
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Publisher: |
MIT Press |
Saved in:
Online Resource
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