Early Warning Indicators and Optimal Policies for Mitigating Economic Crises: Evidence From Meta-analysis
Year: 2020
Type: article
Study designs: Systematic Review, Meta-Analysis
Abstract: This study examines the early warning indicators of crises and the optimal policies for mitigating economic crises. Based on meta-analysis of 72 studies, we find that the exchange rate is the most used indicator in detecting crises, and the optimal policies for mitigating crises are monetary and fiscal policies. We further find that besides the exchange rate, the interest rate is a dominant indicator of crises in developed countries.Moreover, the foreign exchange, international reserves and current account are the dominant indicators in developing countries. The evidence for developing countries aligns with the finding that policies addressing external sector performance are preferable to mitigate crises in these countries.
Authors: Arlyana Abubakar, Diah Utari, Prayudhi Azwar
Institution: Bank Indonesia
Language: English
Subfield: Finance
Domain: Social Sciences
Open Access status: diamond
OpenAlex ID: W3085738285