Financial Crises and Signal Indicators in BRIC-3 Countries

Abstract

Using the KLR (1998) methodolgy, the financial crises of Brazil, Russia, India and China have been determined in the period 1990-2016. The fifteen main economic indicators that signaled the 24-month crisis window before the beginning of the crisis dates supported by the literature were examined. Subsequently, successful crisis estimators were determined by considering the noise signal ratios for three countries. The identified crisis estimators provide important information about the internal dynamics of countries and the channels of crisis affecting the economies. The common signal indicators are found to be export, import and net borrowing liabilities for Brazil, Russia and China.