Determinants of Currency Crises in Emerging Markets: The Case of Turkey

This paper investigates possible determinants of currency crises in Turkey. We use three different techniques-namely, the signaling approach, structural model, and Markov switching model with monthly data for the period 1992-2004. The results show that money market pressure index, real-sector confid...

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Bibliographic Details
Published in:	Emerging markets finance & trade Vol. 44; no. 5; pp. 54 - 67
Main Authors:	Çeşmeci, Özge, Önder, A. Özlem
Format:	Journal Article
Language:	English
Published:	Abingdon Routledge 01-09-2008 M. E. Sharpe, Inc M.E. Sharpe, Inc Taylor & Francis Ltd
Series:	Emerging Markets Finance and Trade
Subjects:	Bank credit Banking crises Central banks Currency crises Economic crises Economic crisis Economic growth models Economic growth rate Emerging markets exchange rate pressure index Growth stocks Markov analysis Markov models Markov switching model money market pressure index Securities markets signal approach structural model Studies Turkey
Online Access:	Get full text
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Summary:	This paper investigates possible determinants of currency crises in Turkey. We use three different techniques-namely, the signaling approach, structural model, and Markov switching model with monthly data for the period 1992-2004. The results show that money market pressure index, real-sector confidence index, and public-sector variables are significant in explaining currency crises. Hence, one can say that banking crises lead to currency crises. Central banks' real-sector confidence index may be a good leading indicator for currency crises.
ISSN:	1540-496X 1558-0938
DOI:	10.2753/REE1540-496X440504