How Likely are Macroeconomic Crises in the CIS?

Research in International Business and Finance, Vol. 20, pp. 227-238, 2006

Posted: 24 Jul 2007

See all articles by Bernhard Herz

Bernhard Herz

University of Bayreuth

Christian Bauer

University of Trier; Universit├Ąt Trier

Volker Karb

University of Bayreuth

Abstract

Building on a benchmark sample of 78 middle-income countries and based on generalized linear model (glm) estimations we assess the risk of Belarus, Kazakhstan, Russia, and Ukraine to experience currency and / or debt crises as other emerging market economies have repeatedly done before. We find that as a result of their current fiscal and monetary situation these countries face a low but not negligible risk of currency crises. Furthermore, there is also a rather low but not negligible risk of debt crises in all four countries. The risk of twin currency and debt crises is virtually zero in all four countries. In addition to these probability estimations based on the countries' current situation, our analysis also shows that it is essential for all four countries to avoid worsening economic fundamentals as especially an increase in their debt to GDP ratios would very rapidly increase the risk of debt and / or twin crises to serious levels in all countries.

Keywords: currency crisis, debt crisis, panel data, developing countries, CIS currency crisis, debt crisis, panel data, developing countries, CIS

JEL Classification: F31, F33, F34, F41

Suggested Citation

Herz, Bernhard and Bauer, Christian and Karb, Volker, How Likely are Macroeconomic Crises in the CIS?. Research in International Business and Finance, Vol. 20, pp. 227-238, 2006, Available at SSRN: https://ssrn.com/abstract=1002586

Bernhard Herz (Contact Author)

University of Bayreuth ( email )

Universitatsstr 30
Bayreuth, D-95447
Germany

Christian Bauer

University of Trier ( email )

15, Universitaetsring
Trier, 54286
Germany

Universit├Ąt Trier ( email )

Germany

Volker Karb

University of Bayreuth ( email )

Universitatsstr 30
Bayreuth, D-95447
Germany

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