"Using an early warning system (EWS) model, this paper provides more empirical evidence on the causes of the 1997 Asian financial crisis, with a view to discriminating between the two hypotheses of "weak fundamentals" and "investors' panic." The results show that there are strong warning signals...

This paper shows that agents underreact to rare and extreme signals. Agents observing these signals choose delay, hoping to condition their behavior on future actors (who may themselves also delay). This stalemate prevents society from recognizing the presence of rare states, even when the...

Interconnections between banking crises and fiscal crises have a long history. We document the long-run evolution from classic banking panics toward modern banking crises where financial guarantees are associated with crisis resolution. Recent crises feature a feedback loop between bank...

This study aims to evaluate the vulnerability of the Turkish economy in the context of global crises during the 1998:01-2012:08 period employing signals approach improved by Kaminsky, Lizando and Reinhart (1998) [KLR]. Our study is necessary and timely to assess the fragility of Turkey since the...