What do we know about the causes of the crisis?

Andrew K Rose, Mark M. Spiegel 02 August 2010

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The Great Recession was the most important macroeconomic event in a generation. Policymakers are scrambling to guard against any repeat of these cataclysmic events.

One strand of this effort is aimed at setting up an early warning system. The idea is to provide early warnings of macroeconomic or financial vulnerabilities and impending danger. This work seeks to create statistical models that link crisis causes to their effects; it is based on econometric models of the incidence of macroeconomic and financial crises.

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Topics:  Global crisis Macroeconomic policy

Tags:  global crisis, early warning

Reserves and other early warning indicators work in crisis after all

Jeffrey Frankel, George Saravelos 01 July 2010

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With aftershocks of the recent global financial earthquake still being felt in some parts of the world, it would be useful to have a set of “early warning indicators” to tell us what countries are most vulnerable. Many scholarly papers in the past have been devoted to identifying leading indicators of crises (e.g. Rose and Spiegel 2009a).

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Topics:  Global crisis

Tags:  reserves, global crisis, early warning

Could an early warning system have predicted the crisis?

Andrew K Rose, Mark M. Spiegel 03 August 2009

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The 2008 global financial crisis is notable for a number of reasons, including most obviously its severity and speed. The international span of the crisis has also been remarkable; essentially all the industrialised countries have been affected, as well as a large number of developing economies. The crisis has led to renewed interest in the creation of early warning models capable of predicting and hopefully mitigating severity of future crises of this type.

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Topics:  Global economy Macroeconomic policy

Tags:  financial crises, MIMIC, early warning