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The existing literature has explained the causality flow from the exchange rates toward the stock market without explaining the role of the economic crisis in effecting this nexus. This study examines the role of the financial crisis in affecting the nonlinear causality flowing from the exchange...
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This paper attempts to explain the divergent output effects of currency crises through a very simple and intuitive model that relates the effects of a devaluation not only to the financial fragility of banks, but also to the degree of financial market imperfection. The model shows that countries...
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This paper shows that the quality of banks within each country is one of the important factors that can account for the fact that developing economies tend to suffer more severe output contractions in the wake of a currency crisis than more mature economies. In particular, countries with a...
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, various proxies for distance have been used to test their explanatory power on a suitable dependent variable, typically a … the correlation of real exchange rate returns to assess their predictive power. Using a sample of 30 countries for a … explanatory variables and assessing their predictive power. The findings of the research are thus useful for policy makers towards …
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