There is a consensus among scholars that overvalued exchange rates result in currency crises. This paper estimates the equilibrium real exchange rate for Turkey and finds that the lira was indeed overvalued before the crises in 1994 and 2001. However, the actual real exchange rate is at present...

The movement of illegal goods and illegal migrants also points to the importance of Mexico. Ignoring Mexico leaves a large hole in the U.S. security perimeter. If it is so easy for goods and people to move across the border, how does the United States plan to improve security without Mexican...

This study examines the sources of currency crises in ASEAN. The empirical findings indicate that reserve inadequacy, increase of bank’s claims on private sector, deteriorating trade balance and misalignment of real exchange rate increase the probability of a speculative attack on a currency....

Interest rate based tests and savings-investment correlations disagree on the extent of capital mobility in Pacific Rim economies. The apparent success of several East Asian countries in sterilizing capital inflows has also fueled the controversy. This paper argues that previous studies...

Past research on aid and growth is flawed because it typically examines the impact of aggregate aid on growth over a short period, usually four years, while significant portions of aid are unlikely to affect growth in such a brief time. We divide aid into three categories: (1) emergency and...

This paper explores the impact of actual exchange rate regimes on fiscal discipline, which we purportedly link to the effect of announcing the peg and to the availability of external funds. To stress this point, the focus of the analysis is emerging markets spanning from the beginning of the...

In this article, we extend the conditional ICAPM of De Santis and Gérard (1997,1998) using an asymmetric multivariate GARCH specification. The model is estimated, for the period March 1973-March 2003, simultaneously for 8 markets: the world market, 4 developed markets and 3 emerging markets....

Bilateral investment treaties (BITs) have become the most important legal mechanism for the encouragement of foreign direct investment (FDI) in developing countries. Yet practically no systematic evidence exists on what motivates capital-exporting developed countries to sign BITs earlier with...

Indicators of financial crisis generally do not have a good track record. This paper presents an early warning system for six countries in Asia, in which indicators do work.We distinguish three types of financial crises, currency crises, banking crises and debt crises, and extract four groups of...

This overview paper examines two main issues. The first is why the exchange rate matters, especially for emerging market economies. The second is under what circumstances and how countries have dealt with the challenges posed by the exchange rate in recent years in the context of inflation...