This essay has four objectives. The first is to document the current episode of capital inflows to Latin America based on data for ten Latin American countries. 6 The second is to compare the Latin American experience with that of a number of Asian countries that have also been the recipients of...

This study analyzes and provides empirical tests of early warning indicators of banking and currency crises in emerging economies. The aim is to identify key empirical regularities in the run-up to banking and currency crises that would enable officials and private market participants to...

Historically, periods of high indebtedness have been associated with a rising incidence of default or restructuring of public and private debts. A subtle type of debt restructuring takes the form of "financial repression." Financial repression includes directed lending to government by captive...

We study economic growth and inflation at different levels of government and external debt. Our analysis is based on new data on forty-four countries spanning about two hundred years. The dataset incorporates over 3,700 annual observations covering a wide range of political systems,...

Comment: What Nancy Marion does in this paper is to present a cohesive survey of three strands of literature: the theoretical literature on currency crises, banking crises, and the more recent papers that have attempted to link the two. It is the "twin crisis" literature, which focuses on...

Since 1990 capital has flowed from industrial countries to developing regions like Latin America, and parts of Asia. Reentry into international capital markets is a welcome turn of events for most countries. However, capital inflows are often associated with inflationary pressures, a real...

In this chapter we provide a brief review of the “signals” approach used in this book to assess the probability of a currency or a banking crisis. This methodology was first used to analyze the performance of a variety of macroeconomic and financial indicators around the “twin crises” in...

In this study, we begin by assessing the ability of sovereign credit ratings to anticipate crises. In addition, given the wave of sovereign credit ratings downgrades that have followed the crises in Asia, we investigate formally the extent to which credit ratings are reactive. Along the way, we...

The signals approach was applied to 24 of the indicators around the dates of the 29 banking and the 87 currency crises. In what follows, we first compare our results for the 15 original indicators in Kaminsky and Reinhart (1996) to those presented in that study. This exercise assesses the...

This paper examines the behavior of real GDP (levels and growth rates), unemployment, inflation, bank credit, and real estate prices in a twenty one-year window surrounding selected adverse global and country-specific shocks or events. The episodes include the 1929 stock market crash, the 1973...