Bar should be lowered for early warnings on currency crises, says IMF economist
Early warning systems should identify more crises, paper says
Currency crisis early-warning systems (EWS) should err on the side of flagging up more crisis episodes rather than less, even if this leads to an increase in false alarms, according to an IMF working paper published last week.
In Comparing the performance of Logit and Probit early-warning systems for currency crises in emerging market economies, Fabio Comelli takes an agnostic approach to study whether a currency crisis should be called when the weighted average of one-month changes in a country
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