Quality & Quantity

, Volume 46, Issue 6, pp 1825–1846 | Cite as

The study of contagious paces of financial crises

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Abstract

This study deals with the emergence of different regional crises and the comparison of early warning indicators to check for the accuracy of pace of exits. It was found that trade factors and monetary conditions clearly play a pivotal role in affecting the probability of existing time to currency crisis episodes and on the recurrence of crises. More specifically, using the index of market pressure methods, it is likely that the Asian Financial Crisis and the Mexico Tequila Crisis, when compared with the European Exchange Rate Mechanism (ERM) Crisis, were preceded by different spreads accelerating across those countries. The evidence suggests that efficient early warning indicators may exist and may be identified depending on the methods applied to the pace of exit involved.

Keywords

Crisis recurrence Early warning indicators Shared-frailty parametric model 

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Copyright information

© Springer Science+Business Media B.V. 2011

Authors and Affiliations

  1. 1.Department of FinanceChung Yan Christian UniversityChung LiTaiwan, ROC
  2. 2.College of BusinessChung Yuan Christian UniversityChung LiTaiwan, ROC

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