The Empirical Study Of The Coincidence Of Currency Crises And Banking Crises

In 1990's, financial crises broke out frequently and presented some different features. One of the different features is the coincidence of banking and currency crises. That phenomenon is so-called twin crises. The aftermath of twin crises is always more serious and long-term than a sole banking crises or currency crises. There are good theoretical reasons to expect connections between the two crises, but there has little systematically empirical work to find the connections between the two crises. Using empirical methods, this dissertation tries to research the long-run comovement and the casual relationship between currency crises and banking crises.Firstly, this dissertation describes systematically all of currency crises, banking crises and twin crises in a sample of 90 countries during 1975 to 2003, and analyses the relationship between currency crises and banking crises and the trend of the twin crises. Secondly, this dissertation adopts pooled regression models to study joint occurrence between banking and currency crises, and the result shows it is important to studying the twin CTises of emerging market economies. Thirdly, this dissertation uses panel data of 45 economies and conducted bivariate granger's causality test. Our evidence show that the currency and banking crises move together, and the banking crisis can be used as a predict variable of currency crises in emerging market economies. Based on this conclusion, this dissertation puts forward some corresponding suggestions to emerging market economies and our country.