This paper introduces the concept of “debt intolerance,” which manifests itself in the extreme duress many emerging markets experience at debt levels that would seem manageable by advanced country standards. We argue that “safe” external debt-to-GNP thresholds for debt intolerant...

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...

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...

Predicting the timing of currency and banking crises is likely to remain an elusive task for academics, financial market participants, and policymakers. Few foresaw the Asian crises and fewer still could have imagined their severity. However, recent events have highlighted the importance of...

In focusing on the 24 month window prior to the onset of the crisis, the criteria for ranking the indicators presented in our related work does not distinguish between a signal given 12 months prior to the crisis and one given one month prior to the crisis. In what follows we examine this issue,...

Predicting the timing of currency and banking crises is likely to remain an elusive task for academics, financial market participants, and policymakers. Few foresaw the Asian crises and fewer still could have imagined their severity. However, recent events have highlighted the importance of...

A considerable literature has examined the causes, consequences, and policy responses to surges in international capital flows. A related strand of papers has attempted to catalog current account reversals and capital account "sudden stops." This paper offers an encompassing approach with an...

This paper introduces the concept of “debt intolerance,” which manifests itself in the extreme duress many emerging markets experience at debt levels that would seem manageable by advanced country standards. We argue that “safe” external debt-to-GNP thresholds for debt intolerant...

During the past decade a number of countries imposed capital controls that had two distinguishing features: they were asymmetric, in that they were designed principally to discourage capital inflows, and they were temporary. This paper studies formally the consequences of these policies,...

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...