ARE CURRENCY CRISES PREDICTABLE

This paper studies whether exchange rate expectations and overvaluatio ns are predictors of currency crises. The results suggest that overval uation has predictive power in explaining the crises. However, althoug h expected depreciation obtained from survey data partially takes diff erent exchange rate misalignment measures into consideration, expectat ions fail to anticipate currency crises (C) 1998 Elsevier Science B.V. All rights reserved.