Contagion, Monsoons, and Domestic Turmoil in Indonesia : A Case Study in the Asian Currency Crisis /

This paper investigates whether Indonesia's recent currency crisis was due to domestic fundamentals, common external shocks ('monsoons'), or contagion from neighboring countries. Markov-switching models attribute speculative pressure on Indonesia's currency to domestic political...

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Detalhes bibliográficos
Autor principal: Saxena, Sweta
Outros Autores: Cerra, Valerie
Formato: Periódico
Idioma:English
Publicado em: Washington, D.C. : International Monetary Fund, 2000.
Colecção:IMF Working Papers; Working Paper ; No. 2000/060
Acesso em linha:Full text available on IMF
Descrição
Resumo:This paper investigates whether Indonesia's recent currency crisis was due to domestic fundamentals, common external shocks ('monsoons'), or contagion from neighboring countries. Markov-switching models attribute speculative pressure on Indonesia's currency to domestic political and financial factors and contagion from speculative pressures in Thailand and Korea. In particular, the results from a time-varying transition probability Markov-switching model (which overcomes some drawbacks of previous methods) show that inclusion of exchange rate pressures from Thailand and Korea in the transition probabilities improves the conditional probabilities of crisis in Indonesia. There is also evidence of contagion in the stock market.
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Descrição Física:1 online resource (26 pages)
Formato:Mode of access: Internet
ISSN:1018-5941
Acesso:Electronic access restricted to authorized BRAC University faculty, staff and students