Early warning system

About: Early warning system is a research topic. Over the lifetime, 6228 publications have been published within this topic receiving 49327 citations. The topic is also known as: EWS.

Leading Indicators of Currency Crises

Abstract: This paper examines the empirical evidence on currency crises and proposes a specific early warning system. This system involves monitoring the evolution of several indicators that tend to exhibit an unusual behavior in the periods preceding a crisis. When an indicator exceeds a certain threshold value, this is interpreted as a warning "signal" that a currency crisis may take place within the following 24 months. The variables that have the best track record within this approach include exports, deviations of the real exchange rate from trend, the ratio of broad money to gross international reserves, output, and equity prices.

Assessing Financial Vulnerability: An Early Warning System for Emerging Markets

Abstract: Ever since the ERM crises of 1992-93 and the Mexican crisis of 1994-95, there has been a heightened interest in early-warning signals of financial crises. This study reviews the literature on the origins of currency and banking crises. It then presents a comprehensive battery of empirical tests on the performance of alternative early-warning indicators for emerging-market economies. The study identifies crisis-threshold values for early-warning indicators that differ both by country and by indicator. This allows the authors to make historical comparisons among banking or currency crises, as well as to draw conclusions about which specific indicators have, over time, sent the most reliable early-warning signals of future currency or banking crises in emerging markets.

Do indicators of financial crises work? An evaluation of an early warning system

Abstract: The object of this paper is to develop an operational early warning system (EWS) that can detect financial crises. To achieve this goal the paper analyses and extends the early warning system developed by Kaminsky, Lizondo and Reinhart (1998) and Kaminsky and Reinhart (1999) that is based on the ‘signal’ approach. This system monitors several indicators that tend to exhibit an unusual behaviour in the periods preceding a crisis. When an indicator exceeds (or falls below) a threshold, then it is said to issue a ‘signal’ that a currency crisis may occur within a given period. The model does a fairly good job of anticipating some of the crises in 1997/1998, but several weaknesses to the approach are identified. The paper also evaluates how this system can be applied to an individual country. On balance, the results in this paper are mixed, but the results suggest that an early warning system should be thought of as a useful diagnostic tool. Copyright © 2002 John Wiley & Sons, Ltd.

A review of the recent literature on rainfall thresholds for landslide occurrence

Abstract: The topic of rainfall thresholds for landslide occurrence was thoroughly investigated, producing abundance of case studies at different scales of analysis and several technical and scientific advances. We reviewed the most recent papers published in scientific journals, highlighting significant advances and critical issues. We collected and grouped all the information on rainfall thresholds into four categories: publication details, geographical distribution and uses, dataset features, threshold definition. In each category, we selected descriptive information to characterize each one of the 115 rainfall threshold published in the last 9 years. The main improvements that stood out from the review are the definition of standard procedures for the identification of rainfall events and for the objective definition of the thresholds. Numerous advances were achieved in the cataloguing of landslides too, which can be defined as one of the most important variables, together with rainfall data, for drawing reliable thresholds. Another focal point of the reviewed articles was the increased definition of thresholds with different exceedance probabilities to be employed for the definition of warning levels in landslide early warning systems. Nevertheless, drawbacks and criticisms can be identified in most part of the recent literature on rainfall thresholds. The main issues concern the validation process, which is seldom carried out, and the very frequent lack of explanations for the rain gauge selection procedure. The paper may be used as a guide to find adequate literature on the most used or the most advanced approaches followed in every step of the procedure for defining reliable rainfall thresholds. Therefore, it constitutes a guideline for future studies and applications, in particular in early warning systems. The paper also aims at addressing the gaps that need to be filled to further enhance the quality of the research products in this field. The contribution of this manuscript could be seen not only as a review of the state of the art, but also an effective method to disseminate the best practices among scientists and stakeholders involved in landslide hazard management.