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This paper identifies and describes key features of Caribbean business cycles during the period 1963-2003. In particular, the chronologies in the Caribbean classical cycle (expansions and contractions in the level of output) and growth cycle (periods of above-trend and below-trend rates of economic growth) are identified. It is found that Caribbean classical cycles are longer-lived than those of developed countries and non-Caribbean developing countries. While there are large asymmetries in the duration and amplitude of phases in the Caribbean classical cycle, on both measures the Caribbean growth cycle is much more symmetric. Further, there is some evidence of synchronization among the classical cycles of Caribbean countries, and stronger evidence of synchronization of Caribbean growth cycles.

Business cycles --- Economic cycles --- Economic fluctuations --- Cycles --- Cariribean Area --- Economic policy. --- Macroeconomics --- Production and Operations Management --- Prices, Business Fluctuations, and Cycles: General (includes Measurement and Data) --- Macroeconomics: Production --- Economic growth --- Output gap --- Production growth --- Production --- Economic theory --- United States

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This paper uses a Binary Classification Tree (BCT) model to analyze banking crises in 50 emerging market and developing countries during 1990-2005. The BCT identifies key indicators and their threshold values at which vulnerability to banking crisis increases. The three conditions identified as crisis-prone-(i) very high inflation, (ii) highly dollarized bank deposits combined with nominal depreciation or low liquidity, and (iii) low bank profitability-highlight that foreign currency risk, poor financial soundness, and macroeconomic instability are key vulnerabilities triggering banking crises. The main results survive under alternative robustness checks, confirming the importance of the BCT approach for monitoring banking system vulnerabilities.

Banks and banking. --- Financial crises. --- Bank management. --- Foreign exchange. --- Dollar, American. --- American dollar --- Cambistry --- Currency exchange --- Exchange, Foreign --- Foreign currency --- Foreign exchange problem --- Foreign money --- Forex --- FX (Finance) --- International exchange --- Banks and banking --- Crashes, Financial --- Crises, Financial --- Financial crashes --- Financial panics --- Panics (Finance) --- Stock exchange crashes --- Stock market panics --- Agricultural banks --- Banking --- Banking industry --- Commercial banks --- Depository institutions --- Management --- Money --- International finance --- Currency crises --- Crises --- Finance --- Financial institutions --- Banks and Banking --- Financial Risk Management --- Foreign Exchange --- Investments: General --- Financial Crises --- Investment --- Capital --- Intangible Capital --- Capacity --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Economic & financial crises & disasters --- Currency --- Foreign exchange --- Macroeconomics --- Banking crises --- Financial crises --- Depreciation --- Saving and investment --- Argentina

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This paper compares the evolution of the Australian current account balance over the period 1954–94 against an optimal current account derived from a consumption-smoothing model. The findings indicate that the Australian current account was not used to smooth consumption optimally in the period prior to the relaxation of capital controls in the early 1980s. The results also suggest that in the period since the mid-1980s Australia’s current account deficits have become excessive, and that the increase in national saving required to satisfy its external borrowing constraint is about 2 to 4 percent of GDP.

Exports and Imports --- Macroeconomics --- Current Account Adjustment --- Short-term Capital Movements --- Open Economy Macroeconomics --- Macroeconomic Aspects of International Trade and Finance: Forecasting and Simulation --- Macroeconomics: Consumption --- Saving --- Wealth --- International Investment --- Long-term Capital Movements --- International economics --- Current account --- Current account deficits --- Current account balance --- Consumption --- Foreign liabilities --- Balance of payments --- National accounts --- External position --- Economics --- Investments, Foreign --- Australia

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Consensus estimates put the half-life of deviations from purchasing power parity (PPP) at about four years (Rogoff, 1996). However, conventional least squares estimates of half-lives are biased downward. Accordingly, as a preferred measure of the persistence of real exchange rate shocks, this study uses median-unbiased estimators of the half-life of deviations from parity, which correct for the downward bias of conventional estimators. The paper tests for PPP using real effective exchange rate data for 90 developed and developing countries in the post-Bretton Woods period. Support for PPP is found, as the majority of countries experience finite deviations of real exchange rates from parity. The speed of parity reversion is found to be typically much faster for developed countries than for developing countries, and to be considerably faster for countries with flexible nominal exchange rate regimes in comparison with countries having fixed nominal exchange rate regimes.

Foreign exchange rates. --- Purchasing power parity. --- Law of one price --- One price, Law of --- Parity, Purchasing power --- Foreign exchange --- Exchange rates --- Fixed exchange rates --- Flexible exchange rates --- Floating exchange rates --- Fluctuating exchange rates --- Rates of exchange --- Rates --- Foreign Exchange --- Time-Series Models --- Dynamic Quantile Regressions --- Dynamic Treatment Effect Models --- Diffusion Processes --- Open Economy Macroeconomics --- Currency --- Real exchange rates --- Purchasing power parity --- Exchange rate arrangements --- Real effective exchange rates --- United States

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The issue of informational efficiency in the evolution of asset prices is examined using data on equity markets in Jordan, Turkey and Pakistan over the period 1986–93. The analysis is carried out in two steps. The parameters of agents’ dynamic consumption and investment decisions are first estimated, and then the implied equity market price, based on market fundamentals, is compared with the actual evolution of equity market prices. While the informational efficiency of each of the three markets is found to be deficient, the causes of market inefficiency are varied. For Jordan it appears that a large negative shock to economic activity in the late 1980s caused agents to discount market fundamentals. For Turkey and Pakistan it is likely that institutional and legal rigidities in equity and banking markets resulted in these markets being illiquid, although this lack of market depth did reduce in severity for Turkey over the sample period, as liberalization of financial markets occurred.

Econometrics --- Finance: General --- Investments: Stocks --- Macroeconomics --- Model Evaluation and Selection --- Macroeconomics: Consumption --- Saving --- Wealth --- General Financial Markets: General (includes Measurement and Data) --- Pension Funds --- Non-bank Financial Institutions --- Financial Instruments --- Institutional Investors --- Price Level --- Inflation --- Deflation --- Estimation --- Finance --- Investment & securities --- Econometrics & economic statistics --- Stock markets --- Stocks --- Asset prices --- Consumption --- Estimation techniques --- Financial markets --- Financial institutions --- Prices --- National accounts --- Econometric analysis --- Stock exchanges --- Economics --- Econometric models --- Turkey