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COMPOSITE MEASURES OFFINANCIAL TURMOIL
In this book we have emphasized the clustering of crises at several junctures both across countries and across different types of crises. A country experiencing an exchange rate crisis may soon find itself in banking and inflation crises, sometimes with domestic and external default to follow. Crises are also transmitted across countries through contagion or common factors, as we discussed in the previous chapter.
Until now, however, we have not attempted to construct any quantitative index that combines crises regionally or globally. Here, in keeping with the algorithmic approach we have applied to delineating individual financial crisis events, we will offer various types of indexes of financial ...