The Duration of Capital Account Crises—An Empirical Analysis

This paper examines the duration of capital account crises. We develop a new index to identify both the start and the end of these crises. Applying the index to a sample of 18 crisis episodes, we derive stylized facts on crisis duration and review the economic and financial circumstances that prevailed at the dusk of crises, a relatively unexplored area. We use the econometric technique of duration analysis to gauge the relative importance of various factors affecting the probability of exiting a crisis. We find that initial and external conditions are key determinants. But fiscal and monetary policies can also help shorten crisis duration.
Publication date: November 2007
ISBN: 9781451868210
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Money and Monetary Policy , Money and Monetary Policy , Capital account crises , duration , crises identification , capital outflows , capital flows , current account

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