The Duration of Capital Account Crises - An Empirical Analysis
- Resource Type
- Authors
- Mauro Mecagni; Ruben Atoyan; Dimitri Tzanninis; David Hofman
- Source
- SSRN Electronic Journal.
- Subject
- Stylized fact
Index (economics)
Financial crisis
Economics
General Earth and Planetary Sciences
Sample (statistics)
Monetary economics
Current account
Capital account
Duration (project management)
Financial circumstances
General Environmental Science
- Language
- ISSN
- 1556-5068
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.