Not the usual suspects: Critical indicators in a dollarized country's Financial Stress Index

Mansour Ishrakieh, Layal and Dagher, Leila and El Hariri, Sadika (2018): Not the usual suspects: Critical indicators in a dollarized country's Financial Stress Index. Published in: Finance Research Letters , Vol. 32, (2019): pp. 1-6.

Abstract

In this paper we investigate the importance of the dollarization rate in heavily dollarized economies as one of the indicators in a Financial Stress Index. We use data on Lebanon, a middle-income developing country, considered to be one of the highest dollarized countries in the world to construct the first Financial Stress Index for Lebanon. Our findings indicate that the dollarization rate is the most important indicator for the FSI. This should be of relevance to many dollarized countries such as Bolivia, Peru, Uruguay, and others. Remarkably, none of the existing FSIs for dollarized countries has included the dollarization rate.

• Item Type: MPRA Paper
• Language: English
• Keywords: Financial Stress Index; Financial Crisis; Dollarization Rate
• Subjects: E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E58 - Central Banks and Their Policies; G - Financial Economics > G0 - General > G01 - Financial Crises; G - Financial Economics > G1 - General Financial Markets > G18 - Government Policy and Regulation

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