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Review of Economic Perspectives

Národohospodárský obzor; The Journal of Masaryk University

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Volume 13, Issue 4


The Relationship between Fiscal Sustainability and Currency Crises in Some Selected Countries

Alexis Cruz-Rodríguez
  • Corresponding author
  • Pontificia Universidad Católica Madre y Maestra, Av. Abraham Lincoln Esq. Rómulo Betancourt, Ensanche La Julia, Santo Domingo, Dominican Republic
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Published Online: 2014-01-25 | DOI: https://doi.org/10.2478/revecp-2013-0008


The aim of this article is to assess whether a Fiscal Sustainability Indicator (FSI) can be used to predict the probability that a currency crisis occurs. The FSI developed by Croce and Juan-Ramón (2003) is employed. Two different definitions for currency crises are used to evaluate whether they induce different results in the analysis. In general, the results suggest that the lagged FSI has an explanatory power over currency crises in some countries.

Keywords : Currency crises; foreign exchange; fiscal sustainability; probit model

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About the article

Published Online: 2014-01-25

Published in Print: 2013-12-01

Citation Information: Review of Economic Perspectives, Volume 13, Issue 4, Pages 176–194, ISSN (Online) 1804-1663, ISSN (Print) 1213-2446, DOI: https://doi.org/10.2478/revecp-2013-0008.

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