Date of Award

Spring 2017

Degree Name

Bachelor of Arts



First Advisor

Miguel Ramirez


The incidence of simultaneous banking and currency crises is a recurring theme in emerging economies operating under fixed or quasi-fixed exchange rates. This thesis conducts an empirical analysis of the underlying determinants of so called “twin crises” by applying a probit econometric model to a sample of 48 emerging economies during the 1980-2013 period. Current account deficits are found to be a robust driver of twin crises, with vulnerability increasing in the size of the deficit relative to GDP. There is also evidence that real exchange rate appreciation and higher levels of short-term debt relative to reserves increase crisis probability. Recommendations for prevention policies include a reduction in agency costs through improved regulation and data transparency, the implementation of a managed float exchange rate regime, and the use of price-based controls on capital inflows.


Senior thesis completed at Trinity College, Hartford Connecticut for the degree of Bachelor of Arts in Economics.