Banking And Currency Crises In Emerging Market: The Magnified Effect Of Twin Crises On Output

This paper analyzes whether there is a magnify effect of twin crises on output and the relationship between banking and currency crises. Using data from 12 emerging countries over the period 1980-2006 the authors found that the cost of twin crises is large but it does not magnify the effect as compare to the combine cost of banking and a currency crisis happens at different time. In fact, the cost of twin crises was smaller when compare to the two crises with a difference between 2 to 2.6 percent using different methodologies.