Real and financial shocks, exchange rate regimes and the probability of a currency crisis

Nakatani, Ryota

doi:10.1016/j.jpolmod.2017.10.004

Cited by 26 publications

(18 citation statements)

References 46 publications

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“…Current Deficit Balance Constraint: For an economy, being unable to balance the current deficit with financial account causes currency crises in the country [65]. The currency crises might not only trigger other financial and public crises, but also might cause cumulative 5-7% shrinkage in the GDPs of the economies [66] (p. 79).…”

Section: Constraintsmentioning

confidence: 99%

Optimum Renewable Energy Investment Planning in Terms of Current Deficit: Turkey Model

et al. 2020

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In this study, a methodology was suggested for wind and solar energy investment plans through linear optimization model for the countries with an energy-based current deficit problem. The originality of the study is that it is a renewable energy investment model based on the functioning of the balance of payments for current deficit reduction, which has not previously been encountered in the literature. While creating the model, without causing external economic imbalance, certain parameters were taken into consideration such as profit transfers for the foreign direct investments, interest payments for the domestic investments, import rates for the wind and solar energy systems, energy electric power production values, electric power load balance, electricity transmission infrastructure, CO 2 emission, future electric power demand projection, and import source rates in the electric power production. It was proven that the model, for the 2019-2030 period in Turkey, not only is an opportunity for decreasing the current deficit but also ensures reaching the CO 2 emission reduction target. Additionally, through the investments in wind and solar energy, it was calculated that fossil-based electric power production will decrease by 80%, and a CO 2 reduction will be provided, which is equivalent of 100 million tonnes GWh natural gas. As a more general result, an optimization model was created which provides a solution for countries coping with energy-based current deficit in economic terms, energy-based air pollution in environmental terms, and renewable energy technology insufficiency.

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Section: Constraintsmentioning

confidence: 99%

Optimum Renewable Energy Investment Planning in Terms of Current Deficit: Turkey Model

et al. 2020

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“…Liu, Wei, Shi, and Chang (2018) empirically finds highrisk economies are more likely to choose a fixed regime with a low level of composite and political risk in the government. Nakatani (2018) shows that capital controls mitigate the effects of productivity shocks in pegged regimes. Some literatures believe the floating exchange rate regime is a good choice.…”

Section: Literature Reviewmentioning

confidence: 99%

State dependence and exchange rate regime choice: a new empirical explanation to the polarization phenomenon

Ahmad

2019

Economic Research-Ekonomska Istraživanja

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This paper, using the dynamic multinomial choice random effect panel Logit model, and focusing on the intermediate exchange rate regimes, tries to provide new empirical explanations to the special polarization phenomenon. The main findings are as follows: Firstly, the state dependence can influence the choice of exchange rate regimes greatly, and the state dependence can explain the phenomenon of the special polarization. Secondly, the non-state dependence factors influence exchange rate regimes choice of different development stage economies in different manner. The non-state dependence factors can also explain the special polarization. Thirdly, the policy makers will choose the less-flexible exchange rate regimes with the increasing of capital account openness. The intermediate exchange rate regimes can survive and stabilize the economy under certain conditions. Lastly, this paper draws a series of important conclusions and policy implications.

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“…In line with the results, the likelihood of currency crises increased when credit to the private sector increased, while it decreased when GDP growth rates were high and also when the level of net foreign assets was high. Nakatani (2018) examined the likelihood of a currency crisis on a sample of 34 developing countries using the probit method. Practical results demonstrated that productivity shocks and risk premium shocks were important predictors of currency crises.…”

Section: Literature Reviewmentioning

confidence: 99%

Determinants of currency crises in the Republic of Serbia

Marjanović¹,

Marković²

2019

Zb. rad. Ekon. fak. Rij.

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The aim of this study is to overcome the lack of empirical research dealing with the main factors of currency crises in the Republic of Serbia, analyzing periods of currency crises and creating an early warning system to anticipate the upcoming currency crises. Using econometric analysis, this paper examines the determinants of currency crises episodes during the period from January 2007 to May 2018, and based on this, it makes proposals for economic policy makers. It has been shown that dominant factors are those that bind mostly with the effect of factors from the external environment, which is important in assessing and forecasting potential crises in the Republic of Serbia. More specifically, the obtained results indicate that the overvaluation of the national currency, current account balance as a percentage of GDP, imports and stock exchange index are statistically significant variables.

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Real and financial shocks, exchange rate regimes and the probability of a currency crisis

Cited by 26 publications

References 46 publications

Optimum Renewable Energy Investment Planning in Terms of Current Deficit: Turkey Model

Optimum Renewable Energy Investment Planning in Terms of Current Deficit: Turkey Model

State dependence and exchange rate regime choice: a new empirical explanation to the polarization phenomenon

Determinants of currency crises in the Republic of Serbia

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