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Abstract

This article aims at identifying the macroeconomic indicators that account for the Argentine financial crisis. For this purpose, an early warning system (EWS) is built based on a probit model that incorporates six monthly variables spanning the time period between February 1991 and February 2000. The results indicate that the significant indicators are the consumer price index and the ratio of the value of exports to the value of imports. Results further indicate that the predictive power of the model is quite reasonable with a correct prediction probability of 67 percent at 15 percent cutoff level.