Open AccessDeterminants of the Argentine Financial Crisis: Can We Predict Future Crises?
Author(s) -
Mete Feridun
Publication year - 2004
Publication title -
the lahore journal of economics
Language(s) - English
Resource type - Journals
eISSN - 1811-5446
pISSN - 1811-5438
DOI - 10.35536/lje.2004.v9.i2.a2
Subject(s) - probit model , economics , financial crisis , cutoff , warning system , predictive power , econometrics , value (mathematics) , index (typography) , early warning system , financial economics , macroeconomics , statistics , mathematics , philosophy , physics , epistemology , quantum mechanics , world wide web , computer science , engineering , aerospace engineering
This article aims at identifying the macroeconomic indicators thataccount for the Argentine financial crisis. For this purpose, an early warningsystem (EWS) is built based on a probit model that incorporates six monthlyvariables spanning the time period between February 1991 and February2000. The results indicate that the significant indicators are the consumerprice index and the ratio of the value of exports to the value of imports.Results further indicate that the predictive power of the model is quitereasonable with a correct prediction probability of 67 percent at 15 percentcutoff level.