Currency Crashes in Industrial Countries: Much Ado About Nothing?

Joseph E. Gagnon^*

NOTE: International Finance Discussion Papers are preliminary materials circulated to stimulate discussion and critical comment. References in publications to International Finance Discussion Papers (other than an acknowledgment that the writer has had access to unpublished material) should be cleared with the author or authors. Recent IFDPs are available on the Web at http://www.federalreserve.gov/pubs/ifdp/. This paper can be downloaded without charge from the Social Science Research Network electronic library at http://www.ssrn.com/.

Abstract:

Sharp exchange rate depreciations, or currency crashes, are associated with poor economic outcomes in industrial countries only when they are caused by inflationary macroeconomic policies. Moreover, the poor outcomes are attributable to inflationary policies in general and not the currency crashes in particular. On the other hand, crashes caused by rising unemployment or external deficits have always had good economic consequences with stable or falling inflation rates.

Keywords: Exchange rate, depreciation, inflation, unemployment, current account

JEL classification: F31, F32, F41

1. Introduction and Summary

Many economic commentators appear to believe that currency crashes invariably have harmful effects.¹ This paper shows that, for industrial countries, the evidence does not support this commonly held view.

Using quarterly data for 20 industrial countries since 1970, this paper identifies 19 episodes of sharp exchange rate depreciations or currency crashes. The episodes are categorized according to the causal factors that appear to have been important in each case. Three broad groupings of causal factors are identified: inflationary macroeconomic policies, large current account deficits or capital outflows, and rising unemployment rates. Often more than one of these factor groupings appeared to be present.

Crashes were followed by poor macroeconomic outcomes (slow GDP growth, rising bond yields, and falling equity prices) only when they resulted from inflationary macroeconomic policies. Moreover, currency crashes did not, by themselves, appear to contribute to these poor outcomes. Indeed, the evidence suggests that currency crashes tended to counteract the slowing of GDP growth that often occurs during and after inflationary periods. Ceteris paribus, currency crashes do contribute to inflationary pressure, but there are numerous episodes of crashes in which inflation remained constant or even declined in the quarters immediately after the crash, reflecting the effects of other economic forces.

Before 1986, crashes were almost always caused by inflationary macroeconomic policies (and inflationary policies typically led to declining external balances). A common theme among most of the inflationary episodes is the apparent underestimation of the natural rate of unemployment by policy makers. In the wake of these inflationary crashes, the behavior of GDP growth depended critically on monetary and fiscal policies. When authorities decided to fight inflation, recession typically ensued. When authorities did not fight inflation, the economy generally continued to grow.² In most of the episodes driven by inflation, bond yields rose and real equity prices fell, regardless of the stance of macroeconomic policy.

Since 1985, crashes appear to have been caused by negative shocks to economic activity and/or financial market concerns about current account sustainability. Crashes in this period have been less frequent than in the years prior to 1986 and they have always been followed by periods of strong growth with little or no acceleration of inflation, stable or falling bond yields, and rising real equity prices.

2. Previous Studies

An extensive literature seeks to explain financial crises or to identify early warning indicators of such crises, particularly in emerging markets. This literature encompasses banking crises, sovereign debt crises, and currency crises, where "currency crisis" may be defined to include periods of sharp depreciation as well as periods in which a central bank successfully defends a currency peg from a speculative attack. Good reviews of the early warning literature on currency crises are Edison (2003) and Berg, Borensztein, and Pattillo (2004). Three studies that focus on sharp depreciations, or "currency crashes," in emerging markets are Frankel and Rose (1996), Milesi-Ferretti and Razin (1998), and Kumar, Moorthy, and Perraudin (2003). These studies find that depletion of foreign exchange reserves is a robust predictor of currency crashes; other, less robust, predictors include rapid domestic credit growth, an overvalued exchange rate, weak GDP growth, and high industrial-country interest rates. Somewhat surprisingly, these studies do not find a consistent correlation between the level of foreign debt or the current account balance and subsequent currency crashes. Dooley and Frankel (2003) examine the consequences of currency crises in emerging markets. The papers in their volume highlight the importance of large foreign-currency debts and weak macroeconomic policy institutions in explaining the poor economic outcomes in these emerging-market episodes.

In an interesting study that bridges the gap between emerging markets and industrial countries, Osband and van Rijckeghem (2000) search for ranges of relevant macro and financial variables which historically have been associated with extremely low probabilities of a currency crisis in the following year. They find that high foreign exchange reserves, low foreign debt, and a higher (more positive) current account balance imply a very low probability of a currency crisis. After estimating these relationships on developing-country data, they apply them to industrial countries and show that they hold up well. Tudela (2004) applies indicator analysis to industrial countries and finds that import growth, fiscal deficits, non-FDI capital inflows, and an appreciated real exchange rate are all positively related to the probability of currency crisis in the following year. Wright and Gagnon (2006) find that current account deficits, high inflation rates, and weak GDP growth rates have predictive power for currency crashes in industrial countries.

Gagnon (2009) is the only extant study of the effects of currency crashes in industrial countries. Using a different dataset and crash definition than this paper, Gagnon found that currency crashes were followed by rising bond yields only when inflation was high and/or rising before the crash, and that no currency crash since 1985 was followed (or preceded) by rising bond yields. Crashes since 1985 also tended to be associated with rising real equity values. Croke, Kamin, and Leduc (2006), Debelle and Galati (2005), Algieri and Bracke (2007), and Freund and Warnock (2007) examine reversals of major current account deficits in industrial countries. There is some overlap between episodes of currency crashes and episodes of current account adjustment, with crashes tending to occur before adjustments. But many currency crashes are not followed by current account adjustments and many current account adjustments are not preceded by currency crashes. Three of these studies (Debelle and Galati is the exception) find that episodes with the largest currency depreciations are generally those with the most benign outcomes for GDP growth.

3. Data Sources

This paper uses quarterly-average effective, or trade-weighted, nominal and real exchange rates available from the Bank for International Settlements (BIS) based on a group of 26 relatively advanced economies. The effective exchange rates are available from 1964, but we start our analysis in 1970 because most of the other economic series we use are available only from 1970. The 20 countries we study are Australia (AL), Belgium (BE), Canada (CA), Denmark (DK), Finland (FI), France (FR), Germany (GE), Greece (GC), Ireland (IR), Italy (IT), Japan (JA), Netherlands (NL), New Zealand (NZ), Norway (NO), Portugal (PT), Spain (SP), Sweden (SD), Switzerland (SZ), the United Kingdom (UK), and the United States (US).³

Most of the other data used in this paper are from the Organization for Economic Cooperation and Development (OECD) Economic Outlook database. The primary exceptions are equity prices (from the OECD Main Economic Indicators database) and foreign exchange reserves and dollar exchange rates (from the International Monetary Fund (IMF) International Financial Statistics database). Where possible, gaps in the data were filled in using the IMF International Financial Statistics database.⁴Government balances for all countries are at an annual frequency.⁵ Inflation rates are based on GDP deflators.

4. Identification of Crashes

A necessary condition for a crash in this paper is an exchange rate depreciation that exceeds 15 percent over four quarters.⁶ In some cases, the exchange rate continued to decline at a rate in excess of 15 percent for several quarters, but I group such closely connected periods of depreciation as single episodes.

To qualify as a separate episode, the four-quarter exchange rate depreciation must exceed 15 percent and it must not have exceeded 15 percent in any of the previous four quarters. Applying this criterion yields 27 episodes.

In some of these 27 episodes, the sharp depreciation reflected a quick reversal of a previous sharp appreciation. In some other cases, the sharp depreciation was itself reversed soon afterwards. In order to focus on episodes that represent a sustained change in the economic environment, I apply two additional criteria to filter out transitory exchange rate fluctuations.

First, I require that the 15-percent depreciation criterion also holds when measured over the previous eight quarters, to rule out cases in which the exchange rate was simply reversing a temporary appreciation.
- This criterion filters out the following episodes: JA1979, JA1996, NZ1986, NZ1998, SD1977, and UK1986.
Second, I require that the exchange rate not unwind more than one-fourth of its four-quarter depreciation during the subsequent four quarters.
- This criterion filters out the following episodes: IT1995, JA1990, NZ1986, and UK1986.

I believe that excluding most of these episodes is reasonable. In particular, contemporaneous economic reporting generally did not view these episodes as periods of currency crisis. Two potential exceptions are NZ1998 and SD1977, which were viewed as periods of currency crisis by some contemporaneous observers. Including these in our analysis would not have affected the results of this paper; the Swedish experience of 1977 fits in well with the inflationary crashes and the New Zealand experience in 1998 accords well with the crashes driven by rising unemployment.

A third criterion that some previous studies of developing countries have imposed (Frankel and Rose) is that the depreciation is not simply a gradual acceleration of a pre-existing downtrend. That criterion does not appear to be relevant for industrial countries. Requiring that the four-quarter exchange rate depreciation be at least 7.5 percentage points greater than that over the previous four quarters does not filter out any of these episodes.⁷ All of them represented substantial accelerations of the rate of depreciation.

Altogether then, this paper examines 19 episodes of sharp depreciations, or currency crashes: AL1985, FI1992, GC1980, GC1983, GC1985, IT1973, IT1976, IT1993, NZ1975, NZ1984, PT1977, PT1982, SD1983, SD1993, SP1977, SP1983, SP1993, UK1976, and US1986.⁸ Most of these episodes were viewed by some contemporaneous observers as periods of currency crisis. Figure 1 plots the four-quarter change in the nominal effective exchange rate for each country in our dataset, with the beginning of each crash episode marked by a vertical red line.⁹

As an aside, I note that applying the analogous criteria to sharp exchange rate appreciations would identify only 9 episodes of sharp and sustained appreciations: AL2003, GE1973, JA1977, JA1986, JA1993, JA1999, SZ1975, SZ1978, and UK1997. The relative rarity of sharp appreciations implies at least a modest degree of asymmetry between appreciations and depreciations.

5. Causes of Crash Episodes

Variables identified by the empirical literature as related to currency crashes can be grouped into three broad categories relating to underlying factors.

High current or expected inflation. Excessively expansionary macroeconomic policies.
Large current account deficit. Decreasing stock of foreign exchange reserves. Large or growing foreign debt.
- Rising unemployment. Weak aggregate demand. Slow GDP growth.

Moreover, there are interconnections between these factors. In particular, expansionary macroeconomic policies can boost demand for imports and thus lower the current account balance. Also, a drop in foreign demand for a country's exports can create a current account deficit and rising unemployment.

High Inflation

Inflationary policies ultimately put upward pressure on all prices, including the price of foreign currency. A rise in the price of foreign currency is a depreciation of the exchange rate. Whether the exchange rate depreciation happens early or late in the inflationary process depends critically on a myriad of factors, such as wage and price controls, trade barriers, controls on international capital flows, and the exchange rate regime. Perhaps the most important factor is the exchange rate regime.

When the central bank pegs or stabilizes the exchange rate in the face of inflationary macroeconomic policies, prices of goods and services tend to rise before the exchange rate depreciates. These price increases push up the real exchange rate, leading to a decline in the current account balance. Investors may anticipate that a depreciation ultimately will be necessary, leading to outflows of private capital. The downturns in the balances for both current transactions and private capital flows deplete the central bank's foreign exchange reserves, ultimately forcing it to devalue the currency.
When the central bank adjusts the exchange rate frequently or allows it to float in the face of inflationary macroeconomic policies, the exchange rate often depreciates before broad price indexes begin to accelerate. As an asset price set in financial markets, the exchange rate tends to respond quickly to new information, including information on the future stance of macroeconomic policy.

Pressures on External Accounts

As noted above, when the exchange rate is not freely floating, a widening current account deficit and diminishing foreign exchange reserves can be part of the process by which inflationary policies lead to currency crashes. However, other sources of change in the demand and supply of a country's imports and exports can also contribute to a widening current account deficit and diminishing reserves. These include, for example, trade policies, global commodity prices, business cycles in key trading partners, and investor perceptions of the investment climate. A currency crash occurs when investors suddenly decide to pull their capital out or to stop financing the current account imbalance.

Rising Unemployment

A third factor contributing to currency crashes is a negative shock to aggregate demand that slows economic activity and increases the rate of unemployment. In the face of a contractionary shock, central banks tend to ease monetary policy. In the case of fixed exchange rate regimes, the ease takes the form of a devaluation. In the case of floating exchange rate regimes, the ease takes the form of lower interest rates, which in turn push down the exchange value of the currency. If the source of the shock is reduced demand for a country's exports, the current account deficit may also contribute to the currency crash.

Historical Experience

Table 1 displays measures of these three factors around the onsets of currency crashes. The first column shows the difference between inflation in the country experiencing a currency crash and the average over all 20 countries, which is termed "excess inflation." Excess inflation is based on the average annual percent changes from four quarters before the start of the crash to four quarters after the start of the crash.¹⁰The value of 5.4 in the first row implies that the price level in Italy rose by nearly 11 percentage points more than the average across all industrial countries over the eight quarters surrounding the onset of the 1973 crash. The bottom rows show that the mean of excess inflation in crash episodes was 4.4 percent and the mean across all countries and time periods was 0 with a standard deviation of 3.3 percentage points. Numbers in bold are more than one standard deviation above or below the sample mean. In about half of the crash episodes, excess inflation was more than one standard deviation above the sample mean and it was never more than one standard deviation below the mean. This finding corroborates the view that currency crashes are often caused by inflationary policies. Despite the small negative value of excess inflation in Australia 1985, this episode is categorized as an inflationary one because the IMF attributed the crash in part to market unease about monetary conditions and because excess inflation increased markedly over the following two years.

The second column of Table 1 lists the current account balance in the quarter before the start of a crash as a percent of GDP. All but one entry are negative, and five are more than one standard deviation below the mean of -0.3 percent. The table does not plot foreign exchange reserves because the relationship between reserves and currency crashes holds only in the cases of fixed exchange rates.¹¹

The third column of Table 1 shows the change in the unemployment rate over the eight quarters ending in the quarter before the onset of the crash. Six of the crash episodes were associated with a rise in unemployment that exceeded the mean by more than one standard deviation--indeed four episodes exceeded the mean by more than two standard deviations. Although Italian unemployment had changed little on balance over the eight quarters before the 1993 crash, the episode is associated with rising unemployment because unemployment turned up two quarters before the crash and continued to rise for some time afterwards; also GDP growth turned negative shortly before the crash.

The final three columns of Table 1 summarize the causal factors behind each currency crash. The letter "I" stands for excess inflation; "C" stands for the current account deficit; and "U" stands for the change in the unemployment rate. Capital letters are used when the associated factor exceeded its sample mean by more than one standard deviation. Lower-case letters are used when the factor was close to the one standard deviation threshold or when other evidence supports a role for the causal factor as discussed in the case studies below.

At least one factor is identified for every crash episode, and all but four episodes are associated with factors that exceeded the one standard deviation threshold.¹² Prior to the mid-1980s, inflation was always an important causal factor. Rising unemployment seems to have become more important later in the sample.

6. Consequences of Crash Episodes

Table 2 presents evidence on the consequences of currency crashes. The first three columns repeat the causal factors identified in Table 1 for convenience. The next column shows the change in the inflation rate from the eight-quarter period ending in the quarter before the crash to the eight-quarter period beginning with the start of the crash. Roughly half of the changes were positive and half were negative. As in Table 1, entries in bold differ from the sample mean by more than one standard deviation. The largest changes in inflation, both up and down, occurred in the episodes that were driven by inflationary pressures. When inflationary crashes were followed by tighter macroeconomic policies--as discussed in the case studies below--inflation often fell after the crash. Conversely, when crashes were not accompanied by tighter policies--and sometimes crashes were themselves a deliberate step to loosen policy--inflation typically rose after the crash.

The column labeled "Change in Net Exports" displays the change in net exports as a percent of GDP from the quarter before the crash to seven quarters after the crash started (eight quarters in total). This change was almost always positive; only for Greece in 1980 was it notably negative. Inflation in Greece around the 1980 crash was so high that the real exchange rate was reduced only briefly and quickly resumed its upward trend; thus the crash provided no impetus to net exports.

The next column shows the average growth rate of GDP over the eight quarters following the onset of the crash. The average growth rate after the onset of crashes was 1.7 percent, compared to an average of 2.6 percent across all countries and time periods. Growth was more than one standard deviation below the sample average in many episodes and only for New Zealand in 1984 did growth come close to exceeding the sample average by more than one standard deviation. All of the low growth episodes were associated with high values of excess inflation in Table 1.

The column labeled "Change in GDP Growth" shows the change between the growth rate over the eight quarters ending in the quarter before the crash and the growth rate over the eight quarters after the crash. In this column there are episodes that differed from the sample average by more than one standard deviation on both the upside and the downside. Decreases in the growth rate occurred only in episodes that had excess inflation as a causal factor. The largest increases in the growth rate occurred in the 1990s episodes that had unemployment, and not inflation, as causal factors.

The next column shows the change in the long-term government bond yield from the quarter before the crash to three quarters after the onset of the crash.¹³ Bond yields rose sharply in a number of episodes that were associated with high inflation. Bond yields dropped sharply in a number of episodes that were associated with rising unemployment and no excess inflation.

The final column shows the change in a broad equity index deflated by the GDP deflator from the quarter before the crash to three quarters after the onset of the crash. Falling equity prices tend to be associated with inflationary currency crashes and rising equity prices tend to be associated with non-inflationary currency crashes.

Relating Causes to Consequences

Table 3 presents results of regressions that relate the consequences of currency crashes to the causal factors behind crashes. In each column, one of the variables of Table 2 is regressed on the variables of Table 1.¹⁴ For GDP growth and the change in GDP growth, the value of GDP growth over the eight quarters ending in the quarter before the onset of the crash is added to the regression to control for cyclical dynamics that may not be related to crashes. The columns labeled "full" include all independent variables. The columns labeled "restricted" show the results of a sequential test-down procedure that successively eliminates the non-significant independent variables (except the constant).

For GDP growth after the onset of a currency crash, excess inflation during the crash is a significant explanatory factor. Each percentage point of excess inflation lowers GDP growth roughly one quarter of a percentage point. For the change in GDP growth after the onset of a currency crash, both excess inflation and the lagged change in unemployment are significant predictors. Excess inflation has a similar effect to that observed in the previous regressions, but now the change in unemployment is an even more important factor. Each percentage point rise in the unemployment rate before a crash implies a percentage point increase in the GDP growth rate after a crash begins. This finding likely results from policy easing in response to rising unemployment, which appears to be successful in stimulating growth.

For bond yields, the only causal factor that matters is excess inflation. Higher excess inflation is associated with rising bond yields. For real equity prices, all factors appear to matter. The effect of excess inflation is highly significant and robust to the other variables; higher excess inflation is associated with falling real equity prices. Current account deficits and rising unemployment are associated with rising real equity prices, but these effects are less significant and less robust to inclusion of the other variables than the inflation effect.

An important omitted factor in these regressions is the stance of macroeconomic policy. Quarterly data on fiscal deficits are not available for most of these countries in the 1970s and 1980s. Moreover, calculating cyclically adjusted deficits and the effective monetary stance are fraught with pitfalls given the uncertainty about potential output, the effects of price, wage, and capital controls, expectations about future inflation and future fiscal policies, and differences across countries in the relative importance of interest-rate versus exchange-rate channels for monetary policy. The real short-term interest rate (based on trailing four-quarter inflation) is not significant when added to any of the regressions in Table 3. However, the case studies below support the view that the subsequent stance of macroeconomic policy is critical in explaining the consequences of inflationary currency crashes for GDP growth. When governments shifted to fighting inflation, GDP growth typically suffered in the short run. When governments did not fight inflation, GDP growth was generally maintained over the near term. For non-inflationary currency crashes that were associated with rising unemployment, governments always eased macroeconomic policies and GDP growth always rebounded.

Inflation, GDP Growth, and Crashes

The preceding sections show that currency crashes are followed by weak or declining GDP growth only when they appeared to be caused by inflationary policies. A related question is whether crashes themselves retard GDP growth, or whether other aspects of inflationary periods tend to damp growth. To answer this question, consider the growth outcomes of the most inflationary episodes across all countries and years. There are 25 episodes in which four-quarter inflation in one of the 20 countries exceeded the average across all countries by more than two standard deviations (7.2 percentage points).¹⁵ The average GDP growth rate over the eight quarters after this inflationary threshold was breached was 2.2 percent, slightly lower than the sample average growth rate of 2.6 percent. Seven of these 25 episodes were associated with a currency crash.¹⁶ In the crash episodes, GDP growth averaged 2.9 percent. In the non-crash inflationary episodes, GDP growth averaged 2.0 percent. The difference between the crash and non-crash growth means is not statistically significant, but it does suggest that currency crashes may help to ameliorate some of the harmful after-effects of inflationary episodes.

7. Case Studies

This section explores the historical record following each currency crash to bolster the conclusions reported above and to better understand the individual circumstances associated with currency crashes. The primary sources are IMF documents written shortly after each crash episode. "ART" stands for Staff Report for Article IV Consultation. "RED" stands for Recent Economic Developments.

A common theme among the inflationary episodes is that governments underestimated the natural rate of unemployment (sometimes called the non-accelerating inflation rate of unemployment, or NAIRU). The rise of the NAIRU in the 1970s and early 1980s is discussed in Blanchard (2005, p.2) who describes it as a "tough learning experience, both for economists and for policy makers." Attempts by policy makers to stimulate economic activity and reduce unemployment spilled over into high and rising rates of inflation, which appears to have been the major causal factor behind a number of currency crashes.

Italy 1973Q3

Italian authorities appear to have underestimated the NAIRU in the early 1970s and their attempts to stimulate growth spilled over into high inflation. The OECD Economic Survey of Italy in January 1975 (p. 21) states that the primary goal of monetary policy in 1973 was to "maintain the growth of the economy." The real short-term interest rate was slightly negative in 1971 and 1972. (See Figure 5.) Soaring inflation in 1973 pushed the real short-term rate to -7 percent by the start of the crash, and it stayed around -5 percent for most of the next two years even as the authorities attempted to tighten monetary conditions by increasing the nominal rate. In 1974 the authorities also tightened monetary conditions through credit controls (OECD Survey, p. 23, and IMF RED August 1974, p. 48), but it is not clear how much effect these had. Fiscal policy appears to have been stimulative throughout the early 1970s as the deficit grew during the sluggish period of 1971-72 and remained constant in 1973-74 despite rapid economic growth. The lira was allowed to float in February 1973 and it depreciated in several steps over the next few months. The depreciation was driven by the easy stance of monetary policy and a general lack of confidence in Italian macroeconomic policies, especially as inflation ramped up in the first half of 1973. According to the IMF (RED August 1974, p. 47) "speculative activity helped ingrain expectations of further price inflation and exchange rate depreciation."

The net result of these policies was very strong growth of real GDP in 1973 and early 1974. Inflation, however, soared from 6 percent in 1972 to more than 20 percent in 1974. Bond yields rose about 4 percentage points in 1974. The real equity price index jumped shortly after the lire was floated, but then generally performed poorly.

Bottom line: Loose macroeconomic policy caused the crash and continued loose policy after the crash stimulated both growth and inflation.

New Zealand 1975Q4

The New Zealand economy was subject to extremely large terms-of-trade shocks in the early 1970s: first rising prices of farm exports in 1972-73 and then rising prices of oil imports in 1974. (See Figure 6.) Booming farm income led to unsustainably high GDP growth of over 8 percent in both 1973 and 1974. According to the IMF (RED April 1976, pp. 13, 21) monetary and fiscal policies were slightly restrictive in 1974. Nevertheless, the strong growth in economic activity sparked soaring inflation that hit with a lag in 1975, just as the economy fell into recession in response to the oil shock and the global slowdown.¹⁷ In response to the sagging economy, the government returned to expansionary macroeconomic policies in 1975, with rapidly growing public expenditures (IMF RED January 1978, p. 2) and a marked fall in short-term interest rates. The continuation of a large current account deficit led the government to devalue the New Zealand dollar 15 percent in August 1975.

The stimulus to net exports from the depreciation helped to spark a mild recovery in 1976, but the economy was probably operating above long-run capacity throughout the period; the unemployment rate remained below 1 percent through 1977. A tightening of wage and price controls in mid-1976 had only a temporary restraining effect on inflation. (IMF RED January 1978, p. 9) The government adopted tighter monetary and fiscal policies in 1976. (IMF RED January 1978, p. 27) Bond yields rose moderately after the crash. Real equity prices were roughly stable during and immediately after the crash.

Bottom line: The currency crash was caused by a combination of inflation and a negative terms-of-trade shock that widened the current account deficit. Real depreciation provided a temporary boost to the economy, but the beneficial effects were limited as the economy was probably already operating above its sustainable rate.

Italy 1976Q2

As one of the industrial countries that was most dependent on imported oil, Italy's terms of trade suffered acutely from the oil price shock of 1974 and the Italian economy entered a recession, along with much of the rest of the world, in late 1974. According to the OECD Economic Survey of Italy in January 1976 (p. 5), "the Italian authorities shifted their monetary and fiscal policy to a much more expansionary stance as from the beginning of 1975." These policies appear to have had the intended effect on output, albeit at the expense of renewed inflation. GDP resumed rapid growth in the third quarter of 1975. (See Figure 5.) Inflation, which decelerated through late 1975, popped back up in early 1976. The lira crash occurred simultaneously with the burst of inflation. GDP growth was very strong in all 4 quarters of 1976.

The authorities tightened macroeconomic policies immediately after the crash; the short-term interest rate soared from 11 percent to 18 percent. (OECD Economic Survey of Italy in March 1977, p. 25, and IMF RED April 1977, p. 2) Although the burst of inflation kept the real short-term interest rate somewhat below zero for a while, the increase from a more deeply negative value combined with tax increases and spending cuts appears to have brought growth to a brief halt in 1977 and allowed inflation to ease somewhat in 1977 and 1978. Export growth was robust in 1976, 1977, and 1978, and the current account moved up significantly. Bond yields rose initially, but then fell back with the slowdown in GDP growth in 1977. Real equity prices fell in the crash quarter and most of the subsequent quarters.

Bottom line: The currency crash was caused by inflationary pressure. The stimulus to GDP from the depreciation was later offset by tighter macro policies.

United Kingdom 1976Q2

Authorities in the United Kingdom appear to have underestimated the NAIRU in the 1970s. Their attempts to stimulate output and employment spilled over into the highest inflation rate among industrial countries in 1975. (See Figure 10.) According to the IMF (RED July 1977, p. 40) U.K. fiscal policy was "increasingly expansionary" through 1975 and initial plans for 1976 "provided for a mild additional stimulus." The central bank allowed real short-term interest rates to become deeply negative throughout 1975 and early 1976. The pound depreciated sharply in the first half of 1976. In response, the central bank raised interest rates modestly and a small fiscal tightening was announced in mid-1976. Financial markets generally were not impressed by these initial measures and the exchange rate depreciated sharply further in late 1976. The central bank responded by hiking real interest rates into positive territory and the government announced further fiscal tightening in conjunction with an IMF loan package in December 1976. (IMF RED July 1977, p. 44) The fiscal plans may have been based on optimistic assumptions about economic growth and tax revenues, however, because the final data show only a small improvement in the fiscal balance in 1977.

In early 1977, the exchange rate began to strengthen as markets regained confidence in U.K. macroeconomic policies. (IMF RED June 1978, p. 1) The central bank lowered interest rates significantly in 1977, and bond yields also declined. Exports grew relatively strongly in 1976 and 1977. Inflation backed off its peak levels, but remained in double digits. Real equity prices declined briefly around and after the crash, but then recovered within a year.

Bottom line: The crash was caused by inflationary macro policies. After the crash, policies were tightened enough to keep GDP from accelerating, but not enough to fully reverse the spike in inflation.

Portugal 1977Q1

Portuguese authorities appear to have underestimated the NAIRU in the 1970s. From 1971 through 1977 inflation was on a steep upward path that was only moderately interrupted by the recession of 1974-75. (See Figure 7.) The rapid recovery and rising inflation in 1976 caused a significant widening of the current account deficit. The authorities devalued the exchange rate 15 percent in February 1977, but this initial devaluation reversed only about half of the real appreciation caused by high inflation since 1973. As monetary policy remained expansionary (and fiscal policy was roughly neutral) inflation remained high and the external balance did not begin to improve. Portugal experienced a currency crisis in August 1977 that led to a new managed floating regime and further exchange rate depreciation through 1978. (IMF RED December 1978, p. 1)

Monetary policy was tightened significantly in late 1977 and early 1978. Real interest rates rose substantially (although they remained slightly negative) and quantitative credit restrictions were also tightened. Fiscal policy was roughly neutral in 1978. Exports grew strongly in 1978 and 1979. GDP growth was moderate and inflation remained high. Wage and price controls may have prevented inflation from increasing further. (IMF RED July 1984, pp. 8-9) Bond yields rose markedly in the quarters after the crash. Equity price data are not available.

Bottom line: The crash was caused by inflationary macro policies. After the crash, policies were tightened enough to offset the stimulus from net exports, but not enough to end high inflation.

Spain 1977Q3

Spanish authorities appear to have underestimated the NAIRU in the 1970s. From 1971 through 1977 inflation was on a steep upward path that was only moderately interrupted by the recession of 1974-75. (See Figure 8.) The rapid recovery and appreciating real exchange rate caused a widening of the current account deficit in 1976. The authorities devalued the exchange rate 20 percent in July 1977, reversing much of the real appreciation caused by high inflation since 1973.

Monetary policy was tightened somewhat in late 1977 and 1978, but interest rates were volatile as the central bank's policy focus was on the growth of the monetary aggregates rather than on interest rates. Fiscal policy was loosened in 1978 and then tightened in 1979. (IMF RED February 1980, pp. 1-2, 20, 34) Exports grew moderately in 1978 and 1979. GDP growth was weak and inflation moved down.

Bottom line: The crash was caused by inflationary macro policies. After the crash, policies were tightened to more than offset the stimulus from net exports and damp inflation.

United States 1978Q3

The dollar crisis of 1978 is not a crash by these criteria. The peak four-quarter change in the nominal effective exchange value of the dollar was -12 percent in the third quarter of 1978. Nevertheless, it may be interesting to examine the circumstances surrounding this episode.

After the recession of 1974-75, GDP grew strongly in 1976 and 1977. (See Figure 11.) The authorities appear to have underestimated the NAIRU and allowed inflation to drift upward in 1977 and 1978 from its 1976 trough. Financial markets were not impressed by the half-hearted steps to tighten policy in late 1977 and 1978, leading to downward pressure on the dollar.

Modest further macro tightening at the end of 1978 (as part of a multi-country support agreement for the dollar) succeeded in stabilizing the currency and caused growth to stagnate in the first half of 1979 despite a significant positive contribution from net exports. The tightening was not sufficient to prevent a continued upward trend in inflation. Indeed, the IMF argued in May 1979 (IMF ART May 1979, p. 16) that "inflation is the most pressing economic problem faced by the United States." Bond yields rose about 1 percentage point over the course of 1978. The dollar crisis had little apparent effect on real equity prices.

Bottom line: The dollar crisis was caused by inflationary macro policies. After the crisis, policies were tightened more than enough to offset the stimulus from net exports, but not enough to damp inflation.

Greece 1980Q2

Greek authorities appear to have underestimated the NAIRU in the late 1970s; the unemployment rate in 1978 and 1979 was probably far below its sustainable rate. (See Figure 4.) According to the IMF (IMF ART August 1980, pp. 1, 5, 7) monetary and fiscal policies were expansionary from 1975 through 1979. Inflationary pressures were already building when the 1979 oil price shock hit. In early 1980 the authorities stepped up the rate of managed depreciation of the exchange rate to stabilize the real exchange rate. The criteria for a currency crash were reached in the second quarter of 1980.

With the real exchange rate little changed, the crash had no significant effect on export growth. According to the IMF (IMF RED March 1983, p.2) Greek monetary and fiscal policies were "increasingly expansionary" through 1981. Nevertheless, it would probably have required a massive further acceleration of inflation to keep unemployment from rising and GDP from stagnating given how long the economy had operated above its sustainable rate. Real equity prices began a precipitous decline in 1980. According to the IMF (ART April 1985, p. 10b) there were no long-term domestic-currency government bonds in Greece in the early 1980s.

Bottom line: The crash was a deliberate government policy to offset high inflation and maintain a stable real exchange rate. With no real exchange rate depreciation there was no net stimulus to aggregate demand. GDP stagnated despite loose macroeconomic policies and inflation continued to rise.

Portugal 1982Q3

The Portuguese authorities appear to have continued to underestimate the NAIRU in the early 1980s. As economic growth slowed in 1980, the authorities instituted expansionary monetary and fiscal policies that continued until the middle of 1983 according to the IMF. (IMF RED July 1984, p. 1) These provided only a modest temporary boost to GDP growth and inflation stepped up substantially. (See Figure 7.) The managed crawl of the exchange rate was not fast enough to offset the higher inflation in Portugal and the real exchange rate appreciated in 1981 and early 1982, contributing to a sustained large current account deficit.¹⁸ In June 1982 the authorities enacted a discrete devaluation, but other macro policies were largely unaffected.

The depreciation helped to boost exports, but output stagnated amidst ongoing high inflation. The current account deficit narrowed but remained large and capital flight accelerated, reflecting a lack of anti-inflationary credibility. In June 1983, in conjunction with an IMF adjustment package, the authorities devalued the exchange rate a further 12 percent and continued the downward crawl. This time, however, monetary and fiscal policies were tightened. (IMF RED July 1984, p. 1) Exports continued to grow strongly, but GDP contracted in late 1983 and early 1984 as tight macroeconomic policies reduced domestic demand. Inflation declined only slightly in 1984 and 1985, as the downward pressure from economic slack was offset by a series of administered increases of government-controlled prices that were part of the fiscal tightening and possibly some pent-up price increases left over from the period of wage and price controls. (IMF RED 1984 p. 9) In 1986, inflation dropped sharply.

Bottom line: The currency crash was deliberate government policy. Exports were strongly stimulated. Macroeconomic policy was initially loose, but then tightened to fight inflation. It took a deep recession and a long lag to get inflation down.

Spain 1983Q1

The Spanish authorities tolerated slow growth in 1979 and 1980 to fight inflation, but when growth collapsed again in 1981, they switched to a focus on boosting growth and employment. (IMF RED July 27, 1984, p. 1) Inflation stepped up temporarily in 1981 in part as food prices rose after a bad harvest. (See Figure 8.) GDP growth recovered moderately in 1982. The managed crawl of the exchange rate barely managed to offset the higher inflation in Spain, leaving the real exchange rate higher than it had been for most of the previous decade and allowing the current account to remain in a moderate deficit. In December 1982 the authorities enacted a discrete devaluation of 8 percent; the peseta was allowed to depreciate further under market pressure in early 1983.

The depreciation boosted exports noticeably, but output was kept on a moderate growth path by a sharp tightening of monetary policy. Fiscal policy was roughly neutral in 1983 and 1984. (IMF RED July 1984, pp. 36-42) Inflation resumed its downward trajectory.

Bottom line: The crash reflected a deliberate government policy to unwind the cumulative real appreciation associated with higher inflation in Spain than in its trading partners. Exports were strongly stimulated. Macroeconomic policy tightened to fight inflation.

Greece 1983Q1

Ongoing high Greek inflation, at more than 20 percent per year, pushed up the real exchange rate in 1982 and exacerbated the economic slump that began in 1981. (See Figure 4.) To fight inflation, the authorities tightened fiscal policy, and the public sector deficit declined slightly between 1981 and 1983, despite stagnant GDP. At the time, fiscal policy was viewed as very tight. (IMF ART April 1985, p. 2) Monetary policy remained loose, however, with negative real interest rates. To offset the loss of competitiveness from high inflation, the authorities devalued the currency 16 percent in January 1983.

As the decline in the real exchange rate was rather modest, exports benefited only a little. Inflation remained high and the economy grew slowly. Real equity prices continued their steep decline.

Bottom line: The crash was a policy move designed to offset a real appreciation caused by high domestic inflation. Economic effects were minor.

Sweden 1983Q1

In the early 1980s, Sweden experienced several years of slow GDP growth, rising unemployment, and a large current account deficit. (See Figure 9.) Inflation was moderately high. Sweden had pegged its exchange rate to a basket of currencies. On the advice of the IMF, Sweden devalued its currency by 10 percent in late 1981.¹⁹ In October 1982, a newly elected social democratic government devalued the krona by a further 16 percent. The devaluation first met the crash criteria in 1983Q1.

In the two years following the devaluation, exports grew strongly, GDP growth picked up, inflation remained roughly unchanged, and the current account deficit narrowed. According to the IMF, the government took advantage of the stimulus from the devaluation to slash its budget deficit (IMF ART July 1984, p. 15) and the fiscal balance rose from -6.5 percent in 1982 to -3 percent in 1984. The central bank maintained real interest rates in positive territory and increased them further in late 1984 when inflation did not decline as much as targeted.²⁰ Bond yields fell modestly during and after the crash. Real equity prices jumped up with and immediately after the crash.

Bottom line: The crash was a policy move to stimulate the weak economy and narrow the current account deficit. It had the intended effect of boosting net exports and GDP with little effect on inflation.

New Zealand 1984Q3

In the 1980s New Zealand experienced stop-go macro policies that alternated between fighting inflation and spurring growth. Interest rates were raised in 1981-82 to fight inflation. (See Figure 6.) Inflation gradually fell in 1982-83, but GDP growth was lackluster and unemployment rose to a post-war high. The central bank cut interest rates in 1983, in response to rising unemployment. However, policymakers appear to have underestimated the NAIRU and inflation began to rise steeply in 1984. The current account deficit widened on average in 1983 and 1984.

In July 1984, a new government took office with a radical strategy to deregulate the economy and to fight inflation through tight monetary policy and fiscal consolidation. One of the first policy steps, however, was to devalue the currency 20 percent in July 1984 in order to narrow the current account deficit. The currency was floated in March 1985. According to the IMF, the budget deficit was reduced from 9 percent of GDP in fiscal year 1983/84 to 4 percent in fiscal year 1985/86. (IMF RED June 1986, p. 3) The central bank raised interest rates sharply in late 1984 and 1985.

The jump in inflation coincided with the currency crash in mid-1984, and the crash undoubtedly contributed to inflation, but the previous loose macroeconomic policies had almost surely guaranteed a substantial rise in inflation in any event. GDP stagnated in 1985 and 1986 as the new government's tight macro policies reduced domestic demand. Nonagricultural exports grew strongly, but agricultural exports were damped by falling world prices, reflecting farm subsidies in major trading partners. (IMF RED June 1986, pp. 69-70) Inflation remained stubbornly high owing to "adjustments following the end of the wage-price freeze ... which had been imposed in June 1982 and terminated in February 1984" according to the IMF. (IMF RED June 1986, p. 13) Further price pressures in 1985 owed to increases in public-sector prices and indirect taxes that were part of the fiscal contraction. Bond yields soared with the crash and the rise in inflation. Real equity prices fell slightly with the crash but then stabilized and even began to increase sharply in 1986, most likely on optimism about the government's ongoing economic reforms.

Bottom line: The crash reflected a deliberate policy to reduce the large current account deficit that resulted from deteriorating terms of trade and inflationary macroeconomic policies. Despite a moderate stimulus to exports, tight macroeconomic policies after the crash held down GDP growth and eventually succeeded in taming inflation.

Australia 1985Q2

According to the IMF, the primary causes of the currency crash of 1985 were market concerns about the large and growing current account deficit and "uncertainties about monetary conditions," which likely reflects a lack of anti-inflationary credibility. (RED February 1986, p. 2)

After a deep recession in 1982-83, four-quarter inflation declined to a low of 4 percent by the end of 1984 even as the Australian economy began to experience a strong recovery. (See Figure 2.) The recovery was spurred in part by a rapid widening of the fiscal deficit, which may have raised concerns about future inflation, despite a fairly tight monetary policy. The rapid recovery in 1984 also contributed to a widening current account deficit. The combination of inflation fears and a growing current account deficit sparked a sharp depreciation in early 1985. Over the remainder of 1985 and 1986, Australia experienced a substantial drop in the world prices of its main export commodities, which damped the stimulative effect of the crash on net exports. (IMF ART February 1987, p. 6) GDP growth was moderate in 1985 and 1986, but the rapid growth of 1984 probably put Australian output above potential, and inflation steadily increased. Monetary and fiscal policies were fairly tight in 1985 and 1986, but some of this restraint was offset by significant further currency depreciation in 1986, and policies in the end were not tight enough to stabilize inflation. Nevertheless, bond yields rose only modestly and real equity prices moved up strongly.

Bottom line: A combination of inflationary policies and a large current account deficit appear to have caused the crash. The crash had a subdued effect on net exports because of commodity price decline. Macroeconomic policies were not sufficiently tight after the crash, given that output was probably above potential, and inflation gradually intensified.

Greece 1985Q4

According to the IMF, Greek macroeconomic policies eased in early 1985 ahead of parliamentary elections. Inflation was already high and the current account deeply in deficit. By late 1985 the results were not surprising: "Faced with a marked widening of the current account deficit ... an acceleration of inflation ... and a widening fiscal deficit ... the authorities announced a comprehensive economic stabilization program in October 1985" which included a 15 percent currency devaluation. (IMF RED August 1987, p. 1) The package included significantly tighter fiscal policy, some liberalization and de-indexation of the labor market (p. 9), and a temporary tax on imports (p. 104).

The depreciation boosted net exports and the current account deficit narrowed dramatically from about 7 percent of GDP in 1985 to less than 4 percent of GDP in 1986.²¹ (See Figure 4.) GDP stagnated in 1986 and 1987 under the influence of the stabilization program. Inflation declined somewhat but remained high, partly reflecting indirect tax increases.²² Real equity prices rose strongly in the quarters after the crash as confidence in the government's adjustment program increased.

Bottom line: The crash was a deliberate policy to reduce the current account deficit. The authorities tightened other policies to help reduce inflation and growth was lackluster.

United States 1986Q3

The U.S. economy grew at a moderate pace in 1985 and 1986 and inflation was well under control. (See Figure 11.) However, tight monetary policy and loose fiscal policy had engendered a sustained appreciation of the dollar from late 1980 through early 1985. The last year or so of this appreciation probably reflected a dollar bubble.²³ As the U.S. current account headed for a post-war record deficit, the sustainability of the strong dollar came into doubt. The dollar peaked in February 1985 and began to depreciate almost continuously thereafter. The Plaza Agreement of September 1985 may have helped to hasten the decline through joint foreign exchange intervention against the dollar by G-7 countries. The depreciation lasted about three years with few pauses from early 1985 through early 1988. The crash criteria were reached in 1986Q3.

The depreciation provided a strong and lasting boost to exports. By 1988, the current account deficit began to shrink. Inflation rose modestly after the crash but remained below 4 percent. Output continued to grow robustly. Bond yields fell more than 4 percentage points from the dollar's peak in early 1985 through early 1987, before backing up modestly in late 1987. Real equity prices rose with and immediately after the crash.²⁴

Bottom line: Market fears about current account sustainability and coordinated official exchange rate intervention helped to cause the crash. The crash boosted net exports. Both growth and inflation were steady.

Finland 1992Q4

Finland began a serious recession in 1990, owing to monetary tightening to fight inflation, the collapse of exports to the Soviet Union, the bursting of the late 1980s asset bubble, and a banking crisis. (IMF RED July 1993, pp. 1-2) Markets doubted the credibility of the central bank's exchange rate peg in the face of the weak economy and the central bank was forced to raise interest rates and deplete its foreign exchange reserves to defend the peg. (See Figure 3.) The currency was devalued in November 1991 and floated (with a large depreciation) in September 1992. Monetary policy, which had been tight while defending the currency peg, loosened markedly in late 1992.

The economy began to recover in the second half of 1993. Inflation declined during the recession years and stayed generally low, but volatile, during the recovery. Exports made a very large contribution to recovery in 1993 and 1994. Bond yields fell sharply after the crash and real equity prices rose strongly.

Bottom line: The crash was caused by market concerns about an overvalued exchange rate in the face of a major recession. The combination of the crash and an easing of monetary policy spurred strong growth after a modest lag. Inflation remained low.

Italy 1993Q1

The Maastricht treaty of 1992 focused market attention on the convergence criteria for joining the European Economic and Monetary Union by the end of the decade. Inflation and fiscal deficits in Italy were well in excess of the limits specified by Maastricht, but the Italian government had held the exchange rate steady against the Deutschemark for several years. With inflation above that of its trading partners, Italy's real effective exchange rate had marched upward throughout the previous decade, restraining real net exports. (See Figure 5.)

Meanwhile, the unification of Germany in 1990 created a boom in German domestic demand that led the Bundesbank to tighten monetary policy gradually but significantly. In part because of the strong real exchange value of the lira, Italian exporters benefited relatively little from the German boom, while the rest of the Italian economy suffered from the high interest rates that were required to defend the exchange rate peg.²⁵ As the Italian economy slumped, financial markets increasingly doubted the government's resolve to maintain the exchange rate parity. Speculative attacks forced the exit of the lira from the European Exchange Rate Mechanism (ERM) in September 1992. The criteria for a currency crash were reached in the first quarter of 1993.

Policy interest rates were eased substantially in 1993, but the economy continued to contract for most of the year, particularly as the government felt unable to use countercyclical fiscal stimulus in light of the already excessive budget deficit.²⁶ Exports did expand strongly in 1993 and 1994, providing a significant backstop to the weak economy. Inflation declined during 1992 and held steady in 1993 and 1994. Bond yields fell, and real equity prices moved up, with and immediately after the crash.

Sweden 1993Q1

Sweden's economy overheated in the late 1980s, the aftermath of financial liberalization that sparked a real estate boom. (IMF RED August 1993, p.1) The bust hit in 1990 and it intensified in 1991 and 1992 as a banking crisis emerged and the global economy slowed down. Markets doubted the credibility of the central bank's exchange rate target in the face of prolonged economic weakness. After raising interest rates sharply in mid-1992 to defend the krona, the central bank decided to let the krona float in November. (See Figure 9.) The criteria for a currency crash were reached in 1993Q1.

Both monetary and fiscal policies loosened markedly in 1993.²⁷ GDP growth turned positive in 1993Q2 with a large boost from net exports. Inflation, which had dropped sharply in 1992, rebounded only partially in 1993 and remained moderate in 1994. Bond yields fell and real equity prices rose strongly in 1993.

Bottom line: The crash was caused by market concerns about an overvalued exchange rate in the face of a recession. The combination of the crash and an easing of monetary and fiscal policies spurred strong growth after a brief lag. Inflation remained low.

Spain 1993Q3

Inflation in Spain was well in excess of that in Germany and France for most of the 1980s. The Spanish government's policy of holding the exchange rate steady against the Deutschemark meant that Spain's real effective exchange rate had marched upward for many years, restraining real net exports. (See Figure 8.)

Meanwhile, the unification of Germany in 1990 created a boom in German domestic demand that led the Bundesbank to tighten monetary policy gradually but significantly. In part because of the strong real exchange value of the peseta, Spanish exporters benefited relatively little from the German boom, while the rest of the Spanish economy suffered from the high interest rates that were required to defend the exchange rate peg. As the Spanish economy slumped, financial markets increasingly doubted the government's resolve to maintain the exchange rate parity. Speculative attacks forced a series of devaluations of the peseta within the European ERM in September 1992, November 1992, and May 1993. The criteria for a currency crash were reached in the third quarter of 1993.

In August 1993 the ERM bands were widened, which "increased the freedom to adapt monetary policy to the circumstances of the domestic economy." (IMF RED January 1994, p. 25) Policy interest rates were eased substantially in 1993, and fiscal policy also was eased. Exports expanded strongly in late 1993 and 1994. GDP began to recover in 1993Q4. Inflation declined during 1992 and held steady in 1993 and 1994. Bond yields fell, and real equity prices moved up, with and immediately after the crash.

8. Conclusions

Currency crashes in industrial countries have always been associated with at least one of the following causal factors:

Inflationary macroeconomic policies that put upward pressure on all prices, including the price of foreign currency.
Weak aggregate demand and rising unemployment that encourage policymakers to stimulate growth through expansionary monetary policy, including devaluation in the case of a fixed exchange rate.
Large capital outflows or current account deficits that run into financing difficulties. In some cases, these deficits may reflect either of the above forces, but they may also reflect exogenous shifts in the terms of trade or in financial market sentiment.

The consequences of currency crashes depend critically on the causes. Poor outcomes have occurred only after inflationary currency crashes. The responses of macroeconomic policymakers after inflationary currency crashes had important implications for GDP growth. Tighter policies to fight inflation generally reduced GDP in the short run. When authorities did not fight inflation, GDP growth generally held up in the near term. Bond yields usually rose and real equity prices usually fell during and immediately after inflationary currency crashes.

Non-inflationary currency crashes uniformly had good outcomes: GDP growth was average to above average, bond yields fell, and real equity prices rose.

References

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The Wall Street Journal, 2008. The Buck Stops Where? March 17, A16.

Wright, J., Gagnon, J., 2006. Predicting Sharp Depreciations in Industrial Country Exchange Rates. International Finance Discussion Papers no. 881, Board of Governors of the Federal Reserve System, Washington, DC.

Table 1. Evidence of Causes of Currency Crashes

Episode	Excess Inflation	Current Account	Change in Unemp.	Factors Present: Inflation $^{1}$	Factors Present: Current Account	Factors Present: Unemployment
Italy 1973Q3	5.4	-2.0	1.5	I	c	u
New Zealand 1975Q4	3.3	-7.3	0.2	I	C
Italy 1976Q2	6.2	-1.1	0.6	I
United Kingdom 1976Q2	3.2	0.5	1.7	i		u
Portugal 1977Q1	11.8	-7.9	4.6	I	C	U
Spain 1977Q3	10.3	-3.6	1.5	I	c	u
Greece 1980Q2	7.6	-3.5	0.9	I	c
Portugal 1982Q3	11.8	-12.6	-0.5	I	C
Spain 1983Q1 $^{2}$	3.3	-2.5	3.5	I		U
Greece 1983Q1	11.8	-3.1	3.0	I	c	U
Sweden 1983Q1	0.0	-4.9	1.4		c	u
New Zealand 1984Q3	3.8	-7.6	1.2	I	C	u
Australia 1985Q2	-1.0	-4.2	-1.0	i	c
Greece 1985Q4	11.5	-7.7	0.0	I	C
United States 1986Q3	-2.8	-3.2	-0.3		c
Finland 1992Q4	-2.8	-4.1	8.9		c	U
Italy 1993Q1	0.5	-2.1	0.1			u
Sweden 1993Q1	-0.6	-1.9	5.1			U
Spain 1993Q3	1.1	-1.2	4.9			U
Crash Mean	4.4	-4.2	2.0
Sample Mean	0.0	-0.3	0.2
Sample Standard Deviation	3.3	4.7	1.7

Note: Excess inflation equals the annual inflation rate over the eight quarters centered on the start of the crash minus the average inflation rate in all 20 countries over the same period. Current account is in percent of GDP for the quarter before the start of the crash. Change in unemployment rate is measured over eight quarters ending in the quarter before the start of the crash. Bold entries differ from sample means by more than one standard deviation. Sample means and standard deviations are based on the entire sample period and all 20 countries.

1. I - inflation; C - current account; U - unemployment. Column lists factors that exceeded mean by more than one standard deviation in hypothesized direction. Factors in lower case were either close to the one standard deviation criterion or were supported by considerations discussed in the text.

2. For Spain in 1983, the current account is the average over the four quarters of 1982 because there were swings of more than 20 percentage points from quarter to quarter that year.

Table 2. Evidence on Consequences of Currency Crashes

Episode	Causal Factors	Change in Inflation	Change in Net Exports	GDP Growth	Change in GDP Growth	Change in Bond Yield	Change in Real Equity Price
Italy 1973Q3	I c u	7.5	2.2	0.9	-3.5	2.1	-18
New Zealand 1975Q4	I C	10.4	-0.1	-1.3	-8.3	2.1	2
Italy 1976Q2	I	-0.1	3.1	3.5	2.7	4.8	-42
United Kingdom 1976Q2	i u	-8.8	-0.1	3.1	1.5	0.8	-9
Portugal 1977Q1	I C U	3.8	1.6	3.8	0.6	5.8	.
Spain 1977Q3	I c u	-0.9	1.0	0.7	-2.4	1.9	-46
Greece 1980Q2	I c	6.2	-1.6	-2.6	-5.9	.	-34
Portugal 1982Q3	I C	5.1	6.2	-1.3	-3.2	3.6	.
Spain 1983Q1	I U	-2.9	2.0	2.0	1.3	1.7	8
Greece 1983Q1	I c U	-2.2	0.3	0.3	1.2	.	-52
Sweden 1983Q1	c u	0.8	2.0	3.7	2.1	-1.0	51
New Zealand 1984Q3	I C u	7.4	2.1	4.6	0.3	8.7	-4
Australia 1985Q2	i c	1.0	2.1	2.7	-3.0	0.4	26
Greece 1985Q4	I C	-4.0	1.0	-1.5	-4.7	2.4	31
United States 1986Q3	c	0.6	1.1	3.6	0.0	0.7	15
Finland 1992Q4	c U	0.4	4.0	2.0	7.6	-4.7	74
Italy 1993Q1	u	-1.5	3.3	2.3	1.3	-4.8	26
Sweden 1993Q1	U	-1.6	2.8	3.9	6.1	-3.1	54
Spain 1993Q3	U	-1.4	1.0	2.3	2.6	-1.5	21
Crash Mean		1.0	1.8	1.7	-0.2	1.2	6
Sample Mean		-0.4	0.1	2.6	-0.3	-0.1	3
Sample Std. Dev.		3.0	2.1	2.0	2.6	1.4	24

Note: Change in inflation is the difference between the annual inflation rate over the eight quarters after the start of the crash and the annual inflation rate over the eight quarters ending the quarter before the start of the crash. Change in net exports is the difference between net exports as a percent of real GDP seven quarters after the start of the crash and net exports in the quarter before the start of the crash. GDP growth is the annual rate for the eight quarters after the start of the crash. Change in GDP growth is the difference between the annual rate of GDP growth in the eight quarters after the start of the crash and GDP growth in the eight quarters ending in the quarter before the crash. Change in bond yield and change in real equity price are measured from the quarter before the start of the crash to the third quarter after the start of the crash. The real equity price is calculated using the GDP deflator. Sample means and standard deviations are based on the entire sample period and all 20 countries.

Table 3. Relating Causes to Consequences

	GDP Growth: Full	GDP Growth: Restricted	Change in GDP Growth: Full	Change in GDP Growth: Restricted	Change in Bond Yield: Full	Change in Bond Yield: Restricted	Change in Real Equity Price: Full	Change in Real Equity Price: Restricted
Constant	1.91*	2.69***	0.18	-1.12	-0.30	-0.54	-3.4	26.4***
Constant - Standard Errors	(1.04)	(.58)	(1.50)	(1.03)	(1.42)	(.88)	(12.7)	(8.1)
Lagged GDP Growth	0.30		-0.23
Lagged GDP Growth - Standard Errors	(.21)		(.30)
Excess Inflation	-0.22**	-0.22**	-0.16	-0.24*	0.36*	0.45***	-5.6***	-5.7***
Excess Inflation - Standard Errors	(.10)	(.09)	(.15)	(.13)	(.17)	(.14)	(1.2)	(1.4)
Current Account	0.08		0.22		-0.16		-5.9**
Current Account - Standard Errors	(.16)		(.23)		(.26)		(2.5)
Change in Unemp.	0.32 (0.23)		0.83**	1.03***	-0.29		4.5*
Change in Unemp. - Standard Errors	(.23)		(.33)	(.26)	(.29)		(2.3)
R $^{2}$	.40	.27	.64	.60	.46	.40	.70	.53
No. Obs.	19	19	19	19	17	17	17	17

Note: This table presents OLS regressions of consequences, as defined in Table 2, on causes, as defined in Table 1. To control for potential dynamics, GDP growth over the eight quarters ending with the start of the crash are initially included in the regressions of GDP growth and the change in GDP growth after the onset of the crash. Restricted regressions reflect the outcome of sequentially testing down and eliminating variables that are not significant at the 10 percent level; for the change in real equity price, all variables are significant at the 10 percent level, so the restricted regression applies a 5 percent criterion. In the equity price regression, the current account is not significant at the 5 percent level when the unemployment rate is dropped. *, **, and *** denote significance at the 10, 5, and 1 percent levels, respectively. Values in parentheses represent standard errors.

Figure 1. Nominal Effective Exchange Rates (4-Quarter Percent Change)

Data for Figure 1 immediately follows

Data for Figure 1

TIME	AL	BE	CA	DK	FI	FR	GE	GC	IR	IT	JP	NL	NZ	NO	PT	SP	SD	SZ	UK	US
1971q1	0.29027	-0.62945	6.174667	-0.35034	-0.52117	-0.05161	1.007974	-0.65809	-0.08036	0.422904	-0.1255	0.50964	-0.25391	-0.39314	-0.65406	-0.23286	-0.2277	-0.4373	-0.12684	-1.26729
1971q2	0.401372	-1.006	4.617631	-0.69106	-0.81155	-0.86911	1.371728	-0.92796	-0.06653	0.050129	0.16349	0.693048	-0.40997	-0.31843	-0.63781	-0.62711	-0.11159	2.476597	-0.12926	-1.12707
1971q3	1.292256	-0.54055	0.393431	-1.13163	-1.71006	-2.42147	4.565161	-2.54665	0.094983	-1.13289	2.400464	0.721888	-0.37805	-0.0347	-0.60603	-1.95316	-0.79242	4.292075	0.024021	-1.04061
1971q4	1.047024	2.052483	0.339251	-1.13134	-3.93314	-4.60611	5.649728	-5.16253	0.163522	-2.74985	7.831288	2.747415	0.626453	0.109805	-0.2874	-2.56186	-0.54436	4.08771	0.032023	-4.11204
1972q1	-0.5011	3.044644	-1.96901	-1.52029	-6.93645	-0.37294	5.427493	-8.91439	-0.18368	-2.75174	12.37512	3.051007	-0.181	-0.76761	-3.72679	-2.30588	-0.42481	2.260076	-0.68253	-7.08603
1972q2	-0.82971	3.340756	-0.08446	-1.08235	-6.79864	1.461428	3.901744	-8.88374	-0.34389	-1.83514	13.31072	2.093052	-0.30233	0.055072	-3.41705	-0.70241	0.332492	-0.15091	-0.78914	-7.56777
1972q3	-0.8646	3.628526	1.038838	0.470046	-5.50914	3.693619	0.81643	-6.96765	-4.49498	-0.44552	12.35425	1.910839	-0.22699	0.780653	-2.25657	2.521606	1.965663	0.073965	-6.43851	-6.9249
1972q4	0.209567	1.379335	0.338114	1.889364	-3.21631	5.737319	-0.09781	-3.54771	-6.64213	0.817191	7.024558	-0.20077	-0.89202	0.406394	-2.01573	3.968902	1.961236	1.200971	-9.37364	-3.23966
1973q1	8.863753	1.287482	-0.71179	3.523834	-0.82917	2.947906	2.481671	-4.00799	-8.26404	-2.8578	7.036782	1.045764	1.876706	2.94503	0.229618	3.903376	0.63936	7.865229	-11.6576	-3.84804
1973q2	10.41406	2.784192	-3.97988	5.314087	-0.91237	4.762992	7.482492	-8.60565	-8.20307	-11.8948	8.68647	2.467998	1.43126	5.323873	0.389336	2.220873	-0.26818	11.34575	-11.9756	-7.61144
1973q3	9.51967	2.638386	-5.84085	6.101111	-2.43376	4.393343	16.83464	-14.792	-8.77255	-15.2099	4.585332	4.955091	3.348155	4.926831	1.270403	-3.64216	-0.37769	10.99016	-13.3263	-10.0801
1973q4	14.07441	0.694833	-4.0337	3.627812	-0.90202	3.121249	13.96821	-8.10753	-7.35102	-14.1542	2.405118	7.489556	9.805845	6.521961	-1.46478	-0.24403	-2.33341	7.814146	-11.0608	-8.0202
1974q1	9.637553	-0.50458	1.694774	-0.00965	1.618273	-4.3956	11.11249	-0.66141	-5.44592	-13.9468	-5.07001	5.250094	7.771083	6.938009	-1.52988	3.27953	-3.1143	6.180708	-7.81095	-0.57791
1974q2	5.487413	1.465843	3.914375	1.211297	2.681827	-10.8932	10.42976	-0.05457	-4.34359	-8.88105	-6.09146	7.032701	9.460794	5.775665	-0.81936	1.348303	0.368086	5.444161	-6.19524	0.356372
1974q3	7.829095	1.308814	4.453309	-0.23641	4.484107	-7.07501	-2.10402	8.180908	0.58052	-6.67388	-8.56259	4.890666	7.130478	5.815034	-3.71705	7.682887	-0.54851	5.457073	1.202615	5.406538
1974q4	-9.16514	3.771317	2.438832	1.91826	2.134776	-3.8379	3.115686	-0.5233	-0.37046	-11.6911	-7.97787	3.372661	-6.14934	4.045436	-1.55664	2.704648	2.576572	14.97985	-0.51196	2.68273
1975q1	-12.2196	6.414984	-3.1425	5.562286	1.088752	5.982349	6.708297	-8.88568	-2.37357	-9.49213	-4.47238	6.341865	-5.81898	5.213382	-2.57581	-4.43477	7.561686	16.40508	-3.93343	-3.0656
1975q2	-9.59995	2.636689	-5.80728	3.717147	-0.67028	14.67755	1.064078	-5.27752	-5.38891	-4.4718	-5.47403	4.100473	-7.60798	4.411114	-4.23758	-2.36621	5.567927	12.29869	-7.97841	0.836713
1975q3	-11.5741	0.291546	-4.59369	1.958279	-1.00451	9.86533	1.617199	-12.2226	-7.97217	-3.21271	1.414006	1.187235	-17.5454	0.864765	-3.95498	-2.58222	2.901556	10.87281	-11.1668	1.973407
1975q4	-0.42762	-1.52023	-2.1515	0.135402	-0.93149	8.40282	-0.66212	-13.6557	-8.30845	-0.13124	1.7013	0.53523	-19.0279	1.091301	-4.26919	-1.89541	0.749897	6.538851	-11.3523	3.235265
1976q1	-1.00301	-2.40743	2.392817	-1.14088	0.180703	4.425225	-0.64741	-7.03836	-7.63837	-9.52092	2.172164	-0.94732	-19.384	-0.97097	-2.90671	-3.46345	-0.78712	5.842089	-10.1267	5.485415
1976q2	-1.28591	0.941515	6.758203	1.661432	2.601329	-1.75325	4.490961	-5.60938	-11.5706	-21.4778	4.027393	-0.09843	-21.6633	0.71211	-6.91265	-5.76943	-0.19622	13.02015	-15.4559	5.744957
1976q3	-0.98162	3.531892	6.241356	2.92222	1.866532	-6.03334	8.065752	-2.19884	-10.6776	-19.2076	5.263516	3.604622	-12.1192	3.635306	-9.01424	-8.4432	2.639907	13.16072	-14.6379	1.288975
1976q4	-6.43337	9.077407	2.924466	5.884665	2.715432	-8.88799	12.9729	-1.04433	-14.4933	-22.7518	5.033132	7.926284	-7.12683	7.313297	-10.0456	-9.11832	7.095371	11.14278	-20.2583	0.456486
1977q1	-13.8861	7.769577	-3.56007	5.316337	1.170143	-8.55707	10.35564	-3.12931	-11.2114	-14.667	6.851766	7.288636	-5.78064	5.749068	-17.9966	-4.83616	4.810468	3.401255	-15.635	0.194777
1977q2	-13.0585	6.230017	-8.15689	-0.63621	-6.61374	-7.48137	7.564933	-3.62224	-5.16426	-4.9947	8.081198	7.2562	-2.83377	2.791626	-25.8482	-2.54276	-0.53173	-2.70136	-7.25982	-1.18066
1977q3	-13.6248	6.364358	-10.1293	-1.5754	-6.73726	-1.31114	8.555359	-1.89018	-3.0006	-7.96717	8.371982	5.490193	-2.3118	1.46745	-22.6272	-21.996	-5.22739	0.873081	-4.31579	-1.26633
1977q4	-9.03105	1.767275	-12.6368	-5.85084	-10.3272	-0.05435	5.20041	-1.37277	4.488477	-6.03127	15.9681	0.633658	0.579035	-4.43933	-26.6423	-22.9492	-16.5265	7.577031	6.185441	-3.92335
1978q1	-3.36542	4.794968	-10.691	-3.11664	-13.5705	-2.96349	7.825321	-5.55737	3.637736	-6.11572	14.7161	3.244101	0.001629	-5.29141	-22.0855	-23.0652	-16.9801	19.22237	4.684197	-6.67101
1978q2	-5.18809	2.877744	-9.98276	-0.35554	-10.9782	0.398346	6.196517	-7.82154	-0.33367	-5.51065	18.79892	2.483878	-1.66413	-8.32024	-17.9442	-22.5778	-12.8204	19.86784	-0.7779	-7.4271
1978q3	-8.24196	0.562591	-11.3059	-1.00537	-11.6285	0.024138	3.099411	-12.1147	0.30686	-6.86912	27.16327	0.86748	-3.01901	-8.8593	-25.7912	-0.27892	-8.93681	25.26717	-0.02607	-11.8394
1978q4	-8.56212	3.496855	-11.0488	3.176887	-7.91522	-0.18231	5.657408	-13.7439	-1.66771	-7.93042	20.28479	3.878335	-3.06208	-4.68731	-25.4264	4.760589	-2.18949	17.58108	-2.89249	-10.794
1979q1	-7.38451	1.245267	-9.19901	1.984335	-4.40887	3.375515	3.894451	-8.78616	-2.12709	-6.21599	12.89669	2.40674	-2.41448	-4.49931	-24.9619	7.677077	-1.34155	6.316839	-3.34172	-6.53823
1979q2	-5.68251	0.36555	-4.07843	-1.15901	0.630225	-1.16973	3.897725	-6.52509	1.7897	-5.0271	-1.90466	0.896864	0.435934	-1.3844	-19.3871	13.34873	-0.41716	5.169901	7.482786	-3.06117
1979q3	-1.5356	2.490231	-2.01646	-0.33229	2.824616	-1.79951	6.32163	-4.88669	0.601084	-3.04792	-15.598	2.569279	-2.58624	0.164337	-14.4299	8.713577	1.047797	-2.82902	10.8308	0.765312
1979q4	0.071675	0.773165	1.752792	-3.6082	4.455478	1.997991	5.331145	-4.83582	2.984053	-0.94727	-24.0276	1.222466	-3.55533	-0.71679	-11.9082	4.795138	1.936404	-1.63357	7.71588	4.208902
1980q1	1.389983	-0.44486	3.374926	-8.96296	4.554742	1.516826	4.035839	-8.58223	0.4198	0.126579	-19.1736	0.47158	-4.37089	1.765519	-6.54075	1.601244	2.307156	-0.57486	11.06355	3.922916
1980q2	2.59163	1.472582	-0.63743	-7.44667	5.143729	2.240355	3.238128	-16.2577	-0.6341	-2.75557	-6.08575	1.038716	-6.89211	2.564783	-2.19872	-8.31744	1.116688	-0.21605	8.12697	1.299803
1980q3	3.318608	0.953065	0.89919	-5.98673	4.22437	2.427762	1.745246	-16.6026	0.04912	-4.44288	0.423493	1.800268	-3.76125	2.861367	-0.93144	-9.82551	0.591534	-0.52229	6.101665	0.328261
1980q4	4.864774	-2.85657	-0.78709	-7.17003	2.676094	-2.47848	-4.69522	-13.3162	-7.25983	-5.84217	16.45469	-1.78379	-3.79313	2.189099	1.720889	-10.5	1.026583	-2.08241	14.33151	-0.06724
1981q1	6.061524	-5.00695	-2.02459	-6.01791	2.310705	-5.79455	-7.35264	-12.8434	-11.063	-9.18155	23.58657	-5.36732	-5.43369	0.684694	0.547384	-11.7013	1.481094	-3.11995	12.25713	1.621476
1981q2	7.713652	-6.11276	0.341513	-7.11715	1.302239	-8.34712	-6.6308	-6.85954	-11.8489	-11.5132	15.11883	-6.50572	-5.78097	1.633521	-0.24834	-7.14052	2.271959	-1.83973	6.744128	7.814887
1981q3	10.68546	-6.44541	0.688022	-7.65825	1.919412	-9.62434	-7.1673	-4.96196	-11.9522	-11.1896	9.047668	-7.39629	-7.06345	1.243074	0.072598	-4.29053	-0.3318	0.265833	-2.82589	14.95768
1981q4	6.699349	-3.25882	3.044554	-3.73411	1.984641	-8.54254	0.591532	-5.05387	-4.9328	-11.9202	2.880173	-0.56822	-7.78671	2.096939	-2.95782	-4.96274	-9.37964	10.78534	-9.00015	10.1544
1982q1	2.539061	-5.86824	2.618604	-3.66811	3.020244	-7.31377	2.973015	-3.93237	-1.9449	-9.74635	-4.95868	2.544858	-7.30223	4.326207	-5.06218	-3.48475	-9.74418	15.54018	-9.95949	10.69367
1982q2	-1.46454	-10.4007	-0.86391	-2.63331	3.154614	-5.73723	5.964619	-5.50508	-0.08053	-6.60653	-4.80359	5.573943	-6.87631	3.644171	-8.93282	-5.21975	-10.4168	11.3844	-7.45135	8.358856
1982q3	-8.67863	-10.6171	-0.58045	-4.36757	3.7071	-10.7743	7.42648	-8.09718	-1.31161	-6.1706	-6.24137	7.087574	-3.97645	-0.19592	-18.022	-4.51248	-7.51857	7.101322	1.220491	7.570379
1982q4	-8.03566	-11.4219	0.871463	-4.01508	-5.86809	-8.67242	4.756788	-8.76751	-3.00192	-3.77034	-5.54852	4.450682	-2.32571	-4.69908	-18.1018	-6.90724	-14.5443	-1.445	0.510399	11.91397
1983q1	-8.75902	-5.07079	0.523349	0.870709	-7.94628	-5.49113	7.442337	-23.0431	1.070534	-1.67259	4.951128	5.542797	-4.88179	-7.37457	-20.0631	-16.0002	-17.2043	1.101648	-11.346	5.734237
1983q2	-13.7834	-0.67669	2.713942	1.275627	-7.70109	-9.2763	5.381744	-17.915	-4.59302	-2.36571	8.585359	2.916548	-7.48789	-6.4711	-20.4142	-17.6204	-16.1325	4.709787	-5.63788	4.412112
1983q3	-7.73816	-1.9225	2.779928	0.554222	-7.91074	-4.97825	2.963729	-14.9972	-6.3054	-3.37326	12.44229	0.847584	-6.96394	-1.01885	-23.2882	-20.1117	-15.7477	7.190196	-5.67261	3.30559
1983q4	-2.83408	-2.72725	0.151334	-1.81932	1.156673	-6.62846	1.320166	-21.1533	-7.68995	-4.35544	15.15679	-1.29432	-6.87755	2.450477	-23.3486	-16.927	-0.44194	6.987464	-4.96929	2.015216
1984q1	2.585302	-4.08566	-0.4169	-4.11143	2.421674	-8.50587	-0.78156	-9.87931	-10.0924	-6.53553	8.386156	-2.68053	-3.56612	1.648146	-23.5501	-5.45989	2.59192	2.062169	3.340269	5.450855
1984q2	5.98163	-2.47687	-3.64678	-3.76979	2.306965	-3.15525	-0.86575	-16.1112	-4.13287	-4.78927	8.036938	-0.78342	0.103591	-0.34435	-22.5741	-0.83345	1.497352	-0.14171	-4.03291	4.189949
1984q3	0.137513	-0.73281	-4.60052	-1.90516	1.292114	-2.72635	-0.72603	-16.9485	-2.45717	-4.13702	4.898412	-1.33255	-18.6953	-3.57532	-12.5733	0.469019	1.590776	-3.8652	-7.24663	5.983901
1984q4	-0.00178	0.043191	-3.69164	-1.17489	1.175097	-2.36893	-1.8609	-14.5919	-1.07557	-3.61988	1.462967	-1.94585	-23.1799	-5.57535	-12.5446	2.397116	1.839107	-4.05962	-8.89671	8.194372
1985q1	-10.5808	0.331337	-3.56049	-0.41211	0.042482	-2.30797	-2.98162	-10.637	-0.81999	-3.33086	-1.88467	-2.60203	-23.2766	-4.18333	-11.6683	1.423037	0.584422	-6.90602	-10.946	12.27151
1985q2	-22.0509	-0.14362	-2.8986	0.261425	0.034191	-1.1013	-2.11274	-11.543	-0.94718	-5.1556	-1.87414	-2.15156	-23.4336	-3.367	-11.5242	-1.30187	-0.3467	-3.39148	-0.06256	9.156032
1985q3	-18.8733	0.892953	-3.67723	1.937883	0.574483	2.440849	1.616779	-14.7506	1.427857	-6.87728	2.637131	1.144817	4.156529	-0.98349	-11.3684	-1.92613	-1.1595	2.730782	5.226604	0.243355
1985q4	-29.667	2.582415	-7.92563	3.605234	0.973593	5.739748	5.232297	-30.6539	3.806156	-5.43567	12.44482	3.854548	10.64769	0.620939	-11.7886	-5.44161	-1.30546	4.059615	5.369543	-8.37819
1986q1	-23.462	4.034438	-10.6078	4.847229	0.987831	8.623937	9.233428	-33.6267	7.080118	-2.25066	20.60379	7.359864	0.864355	0.599938	-10.5903	-5.34223	-1.66054	8.304586	2.326426	-18.0326
1986q2	-11.8461	5.037491	-8.42914	5.030545	-1.13447	4.226121	9.003457	-29.8921	8.006391	-0.00947	27.89558	7.565499	3.806543	-4.7205	-9.56003	-4.50383	-1.39895	8.7094	-4.91579	-20.0348
1986q3	-29.0615	4.939618	-9.24993	5.029323	-2.96255	2.126719	9.493269	-27.8855	4.081234	4.480842	32.45904	7.997322	-15.8419	-9.35424	-9.86556	-2.00941	-2.83579	10.15414	-14.7917	-19.953
1986q4	-16.8659	4.989667	-5.3789	5.276704	-3.19476	1.24818	9.568433	-11.4689	1.326228	5.959913	17.65508	7.952786	-17.1107	-11.2401	-9.01599	-0.48359	-3.35337	7.80475	-17.6336	-13.6559
1987q1	-15.4232	5.626592	0.176247	6.058329	-1.4241	-0.26933	9.192493	-11.2645	-1.12412	3.384778	11.76423	7.490846	-3.76535	-11.3368	-9.57588	-3.12585	-2.31404	8.158115	-9.28339	-13.7387
1987q2	-10.1671	3.958727	-0.66005	5.04257	0.763018	1.961771	7.506028	-11.9985	-3.38986	1.221243	8.798713	6.031094	-4.67188	-4.77891	-9.36244	-2.96787	-1.22985	7.233331	-6.33975	-13.0142
1987q3	7.236055	2.651861	2.075196	1.940944	2.251177	1.353188	4.35815	-11.7955	-1.29993	-1.71353	-0.71235	3.426625	10.3836	0.789377	-7.52421	-0.58469	-0.69927	1.124344	-0.26985	-8.10164
1987q4	-3.31213	1.608297	1.039662	0.424885	2.867785	-0.17926	3.211076	-10.6163	-0.0842	-3.3172	8.239312	2.744577	11.28112	0.915313	-7.02616	3.253207	-1.18943	3.763533	8.053398	-13.2117
1988q1	-3.09977	-0.77998	1.683946	-1.4017	2.438692	-1.28764	0.230349	-8.94369	-1.00865	-3.75059	11.57399	0.682575	9.503591	0.881277	-6.36625	4.544577	-0.79403	2.754513	6.973993	-11.3261
1988q2	1.396819	-1.07296	5.442048	-1.96085	1.879862	-1.68155	-0.18677	-7.67926	-1.29698	-3.55901	7.96132	0.263501	9.130178	1.028952	-5.80255	5.701226	-0.35982	-0.83515	6.083061	-8.7078
1988q3	7.863159	-1.9974	6.961181	-1.41004	0.462577	-3.04338	-1.60629	-7.07412	-2.62156	-3.98593	8.106123	-1.51029	1.115767	-2.01818	-5.12483	1.412934	-0.06333	-2.51981	4.755954	-4.85982
1988q4	15.65949	-1.94245	7.604746	-2.5078	0.884278	-3.4478	-2.44581	-7.17752	-3.26494	-3.33825	7.258398	-2.20652	-6.09468	-0.80044	-4.20971	0.47337	1.081407	-4.7715	3.716651	-3.75665
1989q1	18.30555	-2.70444	7.000774	-4.95918	1.006993	-4.27798	-3.78438	-7.22322	-4.81888	-2.53287	1.35804	-3.52957	-8.79121	0.473635	-3.48223	4.947453	0.762392	-7.49946	3.385163	0.862563
1989q2	5.493056	-1.9202	5.193589	-4.26363	3.674406	-2.95261	-2.91843	-8.42209	-3.09946	-0.24507	-5.82877	-2.7063	-8.94608	-1.69393	-3.50155	2.91497	0.299502	-8.21728	-3.58613	5.341818
1989q3	-2.41299	-0.28959	3.7117	-2.26729	4.433999	-0.78505	-0.73049	-7.84136	-0.47394	2.626211	-6.29784	-0.38363	-6.91149	-0.36589	-3.51214	4.938983	0.699707	-3.62343	-4.0461	1.101754
1989q4	-2.77231	1.095197	4.755807	0.804155	3.262562	1.650846	1.659995	-7.59363	2.433756	2.041158	-12.64	1.33745	-1.72418	0.286606	-3.34179	3.758661	-0.31156	-3.9039	-9.54785	3.687324
1990q1	-8.15439	4.342538	1.226509	5.996531	3.502643	5.427398	5.710045	-7.76212	7.313145	3.341084	-16.638	4.585671	-0.34999	-0.4466	-3.30221	1.177799	-1.0125	0.554736	-9.66774	1.161999
1990q2	-1.20911	5.557439	1.4989	7.608001	0.654492	6.134539	6.053328	-9.05512	8.383342	3.857858	-16.2606	4.817927	-3.12573	-0.34766	-2.99774	5.353494	-1.13974	7.320083	-5.38528	-1.49368
1990q3	0.797022	5.379741	0.325849	6.830801	1.434536	6.133807	5.731533	-8.64021	6.728074	1.750898	-8.74221	4.254452	-1.49384	0.34194	-2.6591	5.822513	-1.95882	7.957141	2.779917	-6.32461
1990q4	-7.88957	4.150373	-2.71754	4.788351	1.119815	4.736997	3.931473	-9.79042	4.632432	0.947159	1.732513	2.897099	-4.04969	0.834013	-0.67012	4.219315	-1.86308	8.244836	6.752178	-9.27006
1991q1	-4.08076	2.024867	-0.03785	1.197342	-0.84416	0.800396	1.235224	-11.9122	1.048614	-0.11574	6.017467	0.783256	-4.74374	0.132089	0.112543	4.186955	-0.79971	5.455359	6.251926	-6.82734
1991q2	-1.9095	-1.16539	1.197906	-2.48681	-1.99163	-2.74462	-2.19154	-12.6297	-3.37806	-2.80901	12.63629	-1.84562	-1.09359	-2.89981	0.008936	-0.72009	-1.06433	-0.77698	3.227459	-2.33003
1991q3	-1.60308	-1.25088	1.644974	-2.85558	-4.89781	-3.42278	-2.12805	-13.0819	-2.50074	-2.67903	10.04942	-1.5515	-4.0386	-3.25333	2.097731	-2.73051	-1.25622	-5.87665	-3.82371	1.876656
1991q4	2.942439	-0.62766	3.429737	-2.39058	-8.90313	-2.91346	-1.54772	-11.1701	-1.70323	-1.20812	4.487869	-1.08133	-6.10927	-2.29061	0.673067	-1.29478	0.735492	-5.57821	-3.45082	2.475506
1992q1	-2.06648	-0.59168	-1.32557	-1.74636	-13.7786	-1.12699	-1.1812	-8.62895	-0.94922	-1.21977	6.564735	-0.71408	-7.88617	-1.69429	1.873705	-1.81876	1.201168	-6.27962	-3.54369	1.513873
1992q2	-4.72555	1.35404	-5.36546	1.076682	-12.8451	2.607363	2.22014	-7.17796	1.992681	0.170542	3.605253	1.663213	-10.5545	1.54262	5.115175	0.188988	1.641101	-5.59642	0.775264	-3.30722
1992q3	-13.4519	3.347427	-7.90312	4.261456	-11.7325	5.294042	5.288329	-8.11099	5.19965	0.388172	2.776565	3.968303	-10.0393	3.259322	2.918356	0.193168	4.343679	2.367992	0.242658	-7.28635
1992q4	-11.733	4.239576	-10.8928	5.765396	-16.9815	6.322977	5.550535	-9.2853	6.229453	-12.1924	5.958317	4.5524	-4.18329	0.326543	3.415645	-7.45324	-4.4684	2.989458	-12.8258	1.234446
1993q1	-6.89707	4.336221	-6.15035	7.29156	-19.5401	6.172809	5.585144	-9.16621	0.266461	-20.2041	10.01213	4.528911	-0.88475	-1.42901	0.87347	-7.35554	-19.3319	2.012791	-13.9499	3.29267
1993q2	-9.72185	3.89098	-6.36346	6.427237	-18.0775	5.109376	4.595513	-8.41877	-3.25526	-18.8373	20.46553	4.131546	1.176854	-2.18754	-4.85028	-13.2671	-20.3965	5.13428	-13.6683	-0.08914
1993q3	-5.77262	-0.76648	-6.53053	-0.40896	-17.5877	-0.30039	1.189848	-9.15691	-10.7459	-20.4359	25.70168	1.552117	6.019971	-5.61304	-9.8342	-19.1929	-26.7278	1.929669	-11.1585	5.417349
1993q4	-4.14203	-3.42153	-4.31622	-1.55776	-6.35086	-1.86957	-0.30461	-8.37247	-12.5058	-12.1086	17.67336	0.198533	6.419461	-3.9495	-11.1318	-12.2114	-20.7762	2.448164	1.746684	2.107266
1994q1	1.103351	-1.99646	-6.39812	-3.03588	5.49492	-1.73913	-2.47294	-8.21391	-5.54979	-5.47604	13.63339	-1.67822	7.259838	-3.73678	-10.0362	-15.2658	-3.44856	7.026639	3.712243	-0.01507
1994q2	3.41921	-0.22764	-8.54561	-2.12445	4.241887	-1.51536	-0.502	-8.33281	-1.13584	-4.28003	7.626646	-0.29341	5.972885	-2.62211	-7.6381	-9.12416	-3.04139	6.011437	-0.15098	1.35176
1994q3	5.853751	3.947903	-6.5072	3.543336	7.751667	3.503172	1.927311	-5.88906	3.834768	-4.99643	3.548469	1.730833	3.720148	0.511753	0.160119	-1.48486	-1.05522	6.548182	-2.27192	-3.13686
1994q4	6.824866	4.733236	-5.09426	2.534022	12.26472	2.816116	1.50789	-5.28409	3.449594	-3.62929	5.204933	1.245331	4.981394	0.792418	1.535899	-1.67462	3.527525	5.223907	-0.99833	-5.21048
1995q1	-1.44555	5.091769	-7.28566	3.632767	10.52976	3.353803	6.341962	-3.52906	1.700164	-7.92647	6.479492	5.106416	5.203062	3.798666	2.924038	-2.27835	-1.61573	5.764598	-3.46502	-6.40489
1995q2	-9.39891	5.625466	-2.57208	6.224617	12.69555	4.176792	7.104451	-1.67831	1.150538	-16.7689	14.33306	5.959236	6.14451	3.597183	3.616941	-0.86673	-4.78135	8.677085	-5.23214	-10.565
1995q3	-3.58672	3.14209	-0.07117	4.520211	11.62747	2.992475	3.895908	-2.34647	1.182124	-8.65234	2.62821	3.287999	6.764055	2.722777	1.129179	-0.10219	1.210852	5.197622	-3.94971	-4.14803
1995q4	-2.40037	3.39167	0.409631	4.187603	6.013172	3.397983	4.383326	-2.85012	0.3592	-5.64315	-4.80336	3.63698	4.424209	2.349463	0.595991	0.971043	5.800182	7.803786	-5.93911	-1.52785
1996q1	2.672814	0.331198	3.364088	2.069041	0.443274	2.045272	0.18193	-3.99433	1.129228	3.655174	-10.0158	0.428687	6.438559	0.542939	-0.59854	4.702243	8.214006	3.955124	-3.87933	1.550174
1996q2	15.70714	-3.10747	3.167212	-2.67265	-4.50287	0.323229	-3.66876	-2.4264	1.827057	13.58577	-21.7701	-2.98668	6.5588	-0.24982	-1.11709	1.539707	13.9765	-1.84822	0.876033	8.313493
1996q3	10.21613	-1.95483	0.426291	-2.02768	-2.93976	-0.41173	-2.03139	-0.98193	2.44273	9.252553	-13.6949	-1.90875	6.662141	-0.38094	-0.18317	-0.56087	10.95339	-0.64615	1.694852	5.083429
1996q4	9.091374	-3.90091	1.669451	-3.03224	-3.6645	-1.64661	-4.17824	0.196157	4.377474	9.388533	-8.89294	-3.96696	9.121768	0.474962	0.465579	-2.04317	3.33976	-7.74657	8.977811	3.969157
1997q1	7.931771	-5.04655	2.869213	-3.5946	-1.4622	-3.42104	-5.26913	0.198384	5.156232	4.200134	-9.99968	-5.49845	7.43904	3.693556	-0.20862	-4.97979	-1.63219	-11.7086	14.49227	6.324266
1997q2	2.088512	-4.42702	0.473569	-2.40533	-0.87136	-3.85225	-4.52746	-2.99512	1.174071	-0.11245	-6.19182	-5.03852	6.29227	-0.31239	-0.75066	-4.63224	-6.35453	-7.47043	15.71425	6.626096
1997q3	-0.19133	-6.52597	1.595274	-4.82683	-5.46352	-5.97836	-7.55299	-4.18911	-1.21102	-2.06	-1.40084	-7.46067	0.074465	-2.82509	-3.37183	-5.70232	-5.13204	-7.82791	17.20859	8.176549
1997q4	-5.37611	-3.60143	-1.19739	-2.52037	-4.04441	-2.73847	-3.92718	-2.01384	-3.54143	-1.78364	-2.13581	-4.25195	-4.04889	-0.05504	-3.43362	-3.39447	-3.68216	-0.6279	12.22441	10.24552
1998q1	-6.66979	-1.6625	-2.25085	-1.05755	-3.0398	-0.76841	-1.50761	-2.51588	-8.71847	-0.94843	4.703728	-1.91146	-9.35836	-5.16257	-2.99626	-1.4596	-0.61382	5.233065	9.531021	10.2137
1998q2	-11.7267	0.034524	-1.63495	0.015749	-0.60987	1.044553	0.770998	-7.02176	-3.77162	0.638682	-5.25648	0.092731	-15.4334	-1.34101	-1.51526	-0.23339	3.697404	1.786112	6.914432	9.400784
1998q3	-13.0495	2.824723	-6.67865	3.3742	2.297608	4.047534	4.322105	-3.81021	-1.57932	2.257219	-11.6563	3.261445	-14.226	-1.06313	1.067752	2.169213	-1.05814	2.351676	3.684692	9.222171
1998q4	-10.4715	2.175152	-9.51468	3.365978	2.322031	2.413172	2.828494	-5.25615	-0.55949	1.379799	5.380117	2.500706	-14.4212	-7.06131	1.204138	1.33363	-6.76901	2.163408	-1.74108	0.698649
1999q1	-8.68709	0.883218	-7.07006	1.454378	0.751714	0.731213	0.704545	-2.45093	0.915218	0.152976	6.191826	0.929461	-9.44424	-4.71447	0.429464	0.253177	-2.95919	-0.10189	-4.61214	-3.56864
1999q2	2.0082	-1.3935	-2.51365	-0.70468	-1.72329	-1.8344	-2.29974	1.926337	-3.84245	-2.16933	11.2703	-1.83657	-1.14441	-1.72271	-1.01984	-1.47279	-6.39806	-0.1103	-2.17647	-1.96567
1999q3	4.575399	-2.99113	0.588239	-2.88377	-4.02518	-3.59777	-4.40423	-1.60864	-6.09905	-3.72585	21.25109	-3.66362	-1.97547	-0.60019	-2.10805	-2.82765	-1.77571	-1.89524	-1.94939	-4.41545
1999q4	3.080214	-4.85066	4.788203	-5.34245	-6.37607	-5.5469	-6.43484	-3.82267	-8.48703	-5.17774	15.9298	-5.83998	-3.97033	1.064391	-3.2373	-4.20814	2.095728	-5.63783	3.626244	-0.66359
2000q1	0.826833	-4.82739	4.481128	-5.17086	-6.01433	-5.42739	-6.2199	-7.42264	-8.41209	-4.96281	11.05162	-5.91358	-7.02004	-0.05237	-3.20407	-4.06073	-0.31266	-5.93252	5.33428	0.678464
2000q2	-9.61643	-4.54372	-0.13652	-5.0736	-5.84758	-5.20701	-6.09006	-7.65863	-7.66839	-4.77767	15.25781	-5.62462	-10.4111	-5.4582	-2.97011	-3.86133	2.154589	-2.91794	1.76491	0.927065
2000q3	-8.94024	-4.41679	1.561875	-4.66022	-5.47658	-5.16283	-6.00995	-7.59244	-7.62683	-4.7374	8.93649	-5.4815	-12.5685	-3.86942	-2.86944	-3.7495	-1.63757	-1.39221	0.647272	3.596883
2000q4	-11.3818	-4.15922	-0.90761	-4.06739	-4.92195	-4.96209	-5.72846	-6.91312	-7.36943	-4.5036	1.419594	-5.16518	-12.737	-2.82943	-2.64128	-3.48672	-4.4843	0.62042	-0.13707	8.751641
2001q1	-11.1595	-0.15118	-2.85757	0.193563	0.163516	-0.43298	-0.51353	-2.15578	-0.47224	-0.3218	-5.22452	-0.26208	-5.76879	-0.60763	0.019808	-0.07245	-6.09914	4.388278	-3.82092	7.443558
2001q2	-6.54357	0.053268	-1.61229	0.820671	0.707326	-0.13988	-0.05991	-0.72135	-0.38311	-0.00998	-8.68543	0.053254	-5.84467	3.591456	0.133154	0.143116	-10.1161	2.240529	-1.21465	8.474397
2001q3	-6.25183	1.118478	-2.41153	2.186963	2.100103	1.133004	1.429239	0.612647	1.449612	1.159205	-8.74118	1.417808	1.288808	3.779234	0.788966	1.018553	-10.3617	3.710886	0.293449	6.12853
2001q4	-1.12755	2.132601	-2.5888	2.874913	3.151127	2.320319	2.748691	2.052976	3.349838	2.18137	-10.7222	2.637352	4.715471	4.449825	1.410513	1.824684	-7.45032	5.279892	-0.57034	3.63183
2002q1	2.173734	-0.62026	-2.64181	-0.19028	-0.54061	-0.74239	-0.80999	-0.34941	-1.38391	-0.65002	-8.52358	-0.72098	2.68281	4.562564	-0.43012	-0.48873	-2.68804	3.468959	2.194549	5.951831
2002q2	5.703039	1.365149	-1.33283	1.321435	1.474848	1.508311	1.716607	1.136431	2.466003	1.332799	-5.47847	1.663021	9.130902	7.954194	0.778729	1.081696	0.893939	5.900665	-0.49612	-1.21406
2002q3	1.505125	1.914754	-3.04074	1.444777	1.883075	2.153654	2.528061	1.546616	3.679881	1.915625	-2.97424	2.341828	6.779156	9.687614	1.065332	1.469476	3.850188	5.192695	0.137992	-4.77558
2002q4	3.296923	2.191506	-1.22487	1.489198	2.091769	2.51294	3.014982	2.011675	4.14925	2.280252	-4.21044	2.710773	12.21473	10.37455	1.227492	1.730285	6.326761	3.103265	0.623852	-5.27952
2003q1	2.713677	4.174295	1.554382	3.732186	4.493583	4.636644	5.508633	3.713763	7.874076	4.200773	1.812083	5.12322	14.66198	7.378868	2.469345	3.304719	4.304088	5.173388	-3.23079	-12.1032
2003q2	5.373044	4.982145	6.996926	4.872327	5.55848	5.558135	6.687192	4.756333	9.140071	5.107315	-1.70773	6.13654	9.891448	-0.61502	3.058866	4.061934	6.060143	1.991678	-4.78146	-12.1572
2003q3	12.74762	3.566341	10.33539	3.53876	4.031927	3.973694	4.798354	3.455969	6.478961	3.646284	-3.80124	4.389437	13.44505	-7.33119	2.27375	2.970804	5.208862	-1.60842	-5.44634	-8.19354
2003q4	15.33617	3.66641	14.16891	3.580619	4.072073	4.113647	4.969498	3.600843	6.907927	3.765299	4.228811	4.606079	10.42679	-8.11236	2.32125	3.017684	5.647423	-1.87504	-4.75906	-13.4324
2004q1	16.64363	2.653041	10.32367	2.570288	3.21432	3.097475	3.896673	2.827975	4.883975	2.881521	3.325046	3.479572	8.252552	-10.525	1.652241	2.151297	3.695476	-3.76456	2.429459	-11.8869
2004q2	5.984937	0.168524	1.107343	0.012443	0.341778	0.316254	0.500797	0.252473	0.394497	0.29612	4.144844	0.396223	3.724532	-3.67441	0.044805	0.05053	0.459808	-0.94667	6.132376	-5.53334
2004q3	2.161021	0.873614	3.441757	0.71155	1.132357	1.088	1.425431	1.064196	1.609906	1.02536	2.595371	1.274018	5.490801	-0.78989	0.451166	0.631572	1.25923	1.823961	5.902718	-6.52154
2004q4	0.475369	1.314849	5.74215	1.118502	1.490199	1.485922	1.81066	1.046409	2.407087	1.337867	-2.01143	1.646157	6.299904	1.626808	0.719634	0.969342	1.443018	2.97324	2.438644	-6.68034
2005q1	-2.22008	0.604022	5.914516	0.267887	0.382508	0.620332	0.653874	-0.10622	1.2767	0.473814	-1.56778	0.637652	2.924668	5.088069	0.289129	0.378559	1.61158	1.937781	-1.35226	-5.3045
2005q2	3.510579	0.600005	7.53165	0.294998	0.527302	0.607982	0.683011	-0.12931	1.183031	0.465782	-2.23429	0.644725	8.789633	3.241024	0.300354	0.378193	-0.23132	0.204049	-1.1245	-5.54096
2005q3	5.897028	-0.1119	8.257152	-0.51841	-0.24815	-0.21295	-0.32481	-0.75672	-0.21199	-0.28567	-3.1032	-0.27797	3.645253	6.341773	-0.12139	-0.16067	-2.87736	-1.41097	-2.26189	-2.64072
2005q4	3.09743	-1.41144	5.806694	-1.42347	-1.34263	-1.66237	-1.98744	-1.76706	-2.95721	-1.57143	-7.65562	-1.83006	3.72444	3.155468	-0.88275	-1.17129	-6.99285	-2.60708	0.023949	4.353861
2006q1	0.328058	-1.31752	8.004271	-1.37161	-1.34214	-1.56274	-1.89533	-1.66737	-2.73534	-1.46561	-8.40607	-1.74119	-2.09649	1.698768	-0.79633	-1.07369	-4.8393	-2.24949	-1.091	4.224787
2006q2	-1.36899	0.29093	10.69998	0.040302	0.323585	0.279597	0.320164	-0.04735	0.315458	0.244445	-6.80185	0.276773	-12.2361	3.195178	0.165762	0.226228	-0.89677	-1.00906	-1.34235	-1.19238
2006q3	-1.36526	0.913245	6.453151	0.660723	1.043551	1.063286	1.325963	0.621564	1.500664	0.980905	-7.07682	1.122424	-9.36263	-1.43029	0.529207	0.700654	2.666919	-0.33272	1.946679	-3.04861
2006q4	-0.20869	1.346871	1.494398	0.995465	1.439576	1.616657	2.017338	1.009981	2.46651	1.494667	-5.03779	1.68838	-6.73164	-3.81539	0.793872	1.027588	5.612428	-1.21438	3.30447	-4.91818
2007q1	2.879706	1.630422	-2.75686	1.451519	1.931232	1.982261	2.52713	1.664238	2.812982	1.876075	-5.88665	2.099023	0.85972	-0.17923	0.948507	1.295153	3.866892	-1.51676	5.215366	-3.18275
2007q2	8.348108	1.633826	1.465958	1.589697	2.033375	1.956677	2.513307	1.724804	2.678872	1.858508	-8.37837	2.091925	13.74859	-1.71193	0.982544	1.337448	2.554385	-3.20075	4.033334	-2.54307
2007q3	7.775386	1.568527	5.778644	1.546233	1.819794	1.832465	2.310481	1.591394	2.678516	1.718729	-4.89404	1.967809	11.08092	3.539532	0.911542	1.263161	1.345199	-2.54089	2.274598	-4.73777
2007q4	8.60212	2.550619	12.83547	2.333173	2.818434	2.852224	3.449736	2.573064	4.572661	2.652117	-1.16009	3.097825	5.057701	7.565156	1.528433	2.08834	0.767802	-1.27024	-2.01952	-9.05533
2008q1	6.587526	3.091177	12.86083	3.038244	3.247984	3.294247	3.79791	3.087116	5.928801	3.011092	7.090655	3.651555	3.435968	5.920357	1.938821	2.55624	0.96914	4.260665	-9.22012	-11.2076
2008q2	5.062817	3.662717	5.537525	3.442104	3.774366	3.912117	4.468572	3.958228	7.066659	3.607725	9.169116	4.213939	-4.67202	5.874814	2.350258	3.079889	2.959758	6.057607	-12.0547	-9.97166

Figure 2. Australia

Data for Figure 2 immediately follows

Data for Figure 2

TIME	COUNTRY	INFLATION	CURRACCTPERGDP	UNEMPRATE	REALINTRATE	FISCBALPERGDP	TERMSOFTRADE4QCHANGE	GDP4QCHANGE	BONDRATE	REALEQUITYINDEX
1970q1	AL		-1.6087	1.593752		-0.0717			5.986667	92.93719
1970q2	AL		-2.4103	1.636896		-0.0717			6.883333	80.12936
1970q3	AL		-2.08737	1.632675		-0.0717			6.876667	83.61253
1970q4	AL		-2.39694	1.649272		-0.0717			6.84	77.08953
1971q1	AL	6.490119	-2.45059	1.693472	0.909882	-0.48701	-11.0285	3.443227	6.846667	69.81059
1971q2	AL	6.509127	-1.66177	1.864508	1.407539	-0.48701	-7.10869	2.097732	6.833333	68.55109
1971q3	AL	6.442913	-1.35468	1.891161	0.207088	-0.48701	-3.25426	5.258239	6.803333	64.14162
1971q4	AL	5.597105	-2.19219	2.06105	0.469562	-0.48701	-12.124	4.654634	6.37	59.34674
1972q1	AL	5.896682	-0.57588	2.371498	-0.36335	-0.88655	-6.32957	2.331664	5.94	68.94705
1972q2	AL	5.639827	0.726737	2.336296	-0.02316	-0.88655	-0.55398	4.3509	5.85	76.51617
1972q3	AL	6.92866	1.189403	2.873059	-2.36199	-0.88655	2.875972	0.704064	5.766667	74.35652
1972q4	AL	8.894701	1.518163	2.705824	-4.27803	-0.88655	17.76947	2.063996	5.77	74.36189
1973q1	AL	8.477857	1.792265	2.564293	-3.49452	-0.18459	24.29336	4.488905	5.75	72.55624
1973q2	AL	11.34055	1.14987	2.340491	-5.14055	-0.18459	23.1475	2.802772	6.346667	63.90549
1973q3	AL	13.72005	-0.08047	2.090125	-6.33672	-0.18459	17.21981	3.667463	7.283333	59.02643
1973q4	AL	15.22246	-0.61862	2.131742	-5.85579	-0.18459	14.61489	5.650534	8.353333	49.16333
1974q1	AL	16.1659	-1.9062	2.096011	-6.54924	-0.99641	6.240157	4.211386	8.363334	51.9281
1974q2	AL	15.61082	-3.72927	2.107463	3.322517	-0.99641	-6.24615	0.70992	8.783334	45.71461
1974q3	AL	15.83978	-3.44413	2.643725	-1.90645	-0.99641	-6.51888	2.146758	9.5	30.58765
1974q4	AL	17.18438	-3.14594	3.701602	-7.03438	-0.99641	-10.8066	-0.88869	9.5	26.88929
1975q1	AL	15.34414	-0.54793	4.488314	-6.44414	-2.91278	-17.208	-0.56659	9.466666	30.67472
1975q2	AL	12.83893	-0.14903	4.878999	-3.67227	-2.91278	-8.39645	5.621322	9.5	31.502
1975q3	AL	12.12729	-1.1273	5.032921	-3.99396	-2.91278	-9.89673	3.038517	10	31.07876
1975q4	AL	12.9028	-2.4172	4.989967	-5.0028	-2.91278	-5.26956	1.525291	10	33.01302
1976q1	AL	11.65918	-1.87654	4.609034	-3.52584	-3.01894	-3.20767	4.509719	10.00133	36.27391
1976q2	AL	14.55577	-1.49147	4.57739	-4.51577	-3.01894	0.975522	1.830006	9.998667	35.11848
1976q3	AL	13.12428	-1.20315	5.128295	-3.67761	-3.01894	1.382929	3.34716	9.990833	36.34163
1976q4	AL	9.376501	-2.59558	4.5695	-0.0365	-3.01894	-1.48965	5.549149	10.11917	31.08296
1977q1	AL	11.78557	-3.13542	5.050032	-2.46223	-3.50852	-3.28428	1.412634	10.4	30.57922
1977q2	AL	9.330072	-3.29436	5.700134	1.586595	-3.50852	-7.72354	2.464319	10.40583	31.01082
1977q3	AL	8.515809	-3.11875	5.976721	2.167524	-3.50852	-11.2852	1.300957	10.34983	29.84491
1977q4	AL	7.666259	-1.81044	5.545216	2.260407	-3.50852	-10.9699	0.344268	9.871166	29.7382
1978q1	AL	7.474159	-3.3911	6.528456	2.219174	-4.17651	-10.0052	1.159599	9.290833	29.91923
1978q2	AL	7.76733	-3.49385	6.323061	2.929337	-4.17651	-6.92594	0.885495	9.134	30.80752
1978q3	AL	7.857203	-3.70596	6.313323	1.896131	-4.17651	-3.13098	2.323964	9.043333	33.2263
1978q4	AL	8.295799	-4.19646	6.272751	0.9342	-4.17651	-0.46228	3.696265	8.854333	32.90312
1979q1	AL	8.064611	-2.5559	6.137217	0.692056	-2.88248	1.93199	7.023398	8.979667	34.71478
1979q2	AL	9.169991	-2.36654	6.356266	1.236675	-2.88248	4.016431	3.4218	9.700833	33.61953
1979q3	AL	9.804709	-1.49813	6.219223	0.031958	-2.88248	6.005472	3.583289	10.07333	35.50231
1979q4	AL	9.93398	-1.45687	6.158206	0.159353	-2.88248	7.482009	4.573705	10.0775	39.01913
1980q1	AL	9.95996	-1.5855	5.928022	0.560041	-2.27657	5.555002	1.196958	10.62767	45.59028
1980q2	AL	8.653605	-2.00811	6.229752	4.993061	-2.27657	-0.80055	3.725649	11.697	45.9961
1980q3	AL	8.787403	-3.30385	6.094779	3.509264	-2.27657	-1.39289	3.447896	11.80017	50.99057
1980q4	AL	9.722281	-3.9272	5.951538	1.924385	-2.27657	-2.73207	2.872776	12.26167	54.30233
1981q1	AL	9.003967	-4.01598	5.7231	4.529366	-2.68426	-1.85272	2.860716	13.0625	49.43272
1981q2	AL	9.297048	-4.15345	5.51429	6.886285	-2.68426	-1.2483	4.392102	13.09333	50.66356
1981q3	AL	9.860974	-4.56113	5.788389	5.625692	-2.68426	0.931556	5.078759	14.385	42.63116
1981q4	AL	10.09817	-5.66958	5.933408	4.851832	-2.68426	-1.5977	3.349468	15	39.13951
1982q1	AL	11.36695	-5.45428	6.141395	6.039713	-3.73376	-5.40561	1.94486	15.06167	32.77584
1982q2	AL	12.38538	-5.39023	6.513907	7.084623	-3.73376	-1.23326	0.817395	15.80417	31.3332
1982q3	AL	10.89991	-3.64741	7.016138	5.740089	-3.73376	-3.50436	-1.47705	16.25083	30.22268
1982q4	AL	10.84929	-3.76013	8.723769	2.970708	-3.73376	-1.5361	-2.80107	14.52167	29.68317
1983q1	AL	9.68901	-3.82351	9.491078	3.537657	-4.92135	1.954966	-2.47359	13.56833	30.70268
1983q2	AL	7.904707	-3.57834	10.15476	5.53196	-4.92135	0.750078	-3.16417	14.17	35.53171
1983q3	AL	8.284883	-3.90792	10.21605	3.721785	-4.92135	1.096624	0.496896	14.69	40.16352
1983q4	AL	6.87559	-3.13459	9.648889	3.251077	-4.92135	3.121125	3.90514	13.54084	41.65685
1984q1	AL	7.155248	-4.02003	9.286023	4.701418	-4.8674	1.906135	7.306956	13.82601	41.54238
1984q2	AL	7.305931	-4.04047	9.128699	6.184069	-4.8674	0.975549	7.769603	13.90555	37.57193
1984q3	AL	5.790304	-4.66947	8.719358	5.673029	-4.8674	1.482532	5.624642	13.17447	38.94721
1984q4	AL	3.866909	-5.63178	8.591413	7.723091	-4.8674	-0.05059	4.967179	13.29387	40.42526
1985q1	AL	4.456886	-4.16325	8.447771	9.693113	-4.88974	-0.15871	4.078511	13.54052	42.27843
1985q2	AL	4.17527	-5.21451	8.425058	11.51473	-4.88974	-7.0895	5.889327	13.76931	45.42149
1985q3	AL	5.056222	-5.91752	8.092987	11.00044	-4.88974	-8.60437	6.195334	13.54234	49.25901
1985q4	AL	6.023731	-6.12555	7.756683	12.0096	-4.88974	-12.8956	5.370476	14.75123	51.515
1986q1	AL	5.345584	-6.12844	7.853763	12.55442	-4.12618	-12.681	3.970631	13.89447	54.56368
1986q2	AL	6.065155	-6.22304	7.567491	8.991512	-4.12618	-6.09384	1.179877	12.58337	59.62704
1986q3	AL	5.592139	-4.96954	8.007893	11.17453	-4.12618	-9.73821	1.030312	13.86005	57.99052
1986q4	AL	7.110434	-4.71616	8.090796	8.9729	-4.12618	-5.51452	1.63939	13.5574	67.23208
1987q1	AL	7.03199	-4.41689	7.992373	9.291344	-2.37546	-4.7099	2.60734	13.70492	74.8626
1987q2	AL	7.58451	-3.96829	7.969562	6.71549	-2.37546	-2.64775	4.285986	12.94766	80.42204
1987q3	AL	8.817976	-3.48715	7.763268	3.592024	-2.37546	4.881513	4.866357	12.78057	95.74436
1987q4	AL	7.639851	-3.37135	7.669527	4.326816	-2.37546	5.506379	5.956835	13.13099	58.04012
1988q1	AL	8.474936	-3.29314	7.290309	2.508397	-0.71954	8.543329	5.39704	12.34727	56.23651
1988q2	AL	7.940217	-4.37189	7.366466	4.31645	-0.71954	11.09163	4.459242	11.87904	64.28881
1988q3	AL	8.681089	-4.69272	6.692356	4.665577	-0.71954	13.13636	3.621546	11.85131	64.5581
1988q4	AL	9.693118	-4.76849	6.52871	4.920216	-0.71954	13.69262	2.769043	12.18588	60.77275
1989q1	AL	8.388405	-5.6227	6.28875	8.061596	-0.56533	14.72862	3.30701	13.47857	59.31625
1989q2	AL	8.172002	-6.05108	5.946147	9.611331	-0.56533	9.730265	5.0209	13.65444	58.87068
1989q3	AL	6.541546	-6.19533	5.777982	11.50512	-0.56533	2.837973	5.349562	13.23285	65.63225
1989q4	AL	5.406997	-5.82204	5.612813	12.75967	-0.56533	2.645817	4.082664	13.35012	62.0777
1990q1	AL	5.213942	-6.36459	5.92852	11.24273	-2.04497	-2.46342	3.71681	13.1325	59.91193
1990q2	AL	5.440226	-4.52056	6.161421	9.629774	-2.04497	-1.84161	1.560221	13.54798	54.57482
1990q3	AL	4.400781	-4.29836	6.887561	9.689219	-2.04497	-1.29572	-0.04053	13.42266	54.80871
1990q4	AL	4.236416	-4.95528	7.54514	8.32025	-2.04497	-6.07907	-0.08729	12.66596	47.60221
1991q1	AL	3.530113	-4.21988	8.321541	8.149887	-4.70258	-7.59432	-1.51364	11.62336	50.4014
1991q2	AL	1.604424	-3.69184	9.162171	9.218909	-4.70258	-8.84222	-1.55271	10.99226	54.86615
1991q3	AL	2.056367	-3.01328	9.516698	7.960299	-4.70258	-6.76809	-0.96405	10.77059	55.99758
1991q4	AL	2.222529	-2.82275	9.889157	6.160804	-4.70258	-3.19147	-0.7643	9.822086	58.65131
1992q1	AL	1.806803	-3.22611	10.0179	5.686531	-5.47456	-0.98483	1.027498	9.970782	57.14046
1992q2	AL	1.869928	-3.74019	10.41769	4.850071	-5.47456	-0.6045	1.502697	9.282183	58.97285
1992q3	AL	1.269915	-3.80454	10.52794	4.500085	-5.47456	-3.12536	2.52194	8.682754	55.06342
1992q4	AL	0.610206	-3.45671	10.75682	5.269794	-5.47456	-3.72443	4.038536	8.850736	52.17019
1993q1	AL	1.223068	-3.18258	10.64928	4.470265	-4.40564	-3.77026	4.17496	8.361087	56.33319
1993q2	AL	1.348631	-3.39754	10.56902	3.864703	-4.40564	-5.97599	4.49298	7.59573	60.20466
1993q3	AL	1.381176	-3.0388	10.5574	3.51549	-4.40564	-4.8723	3.279816	6.908788	67.32412
1993q4	AL	1.394491	-3.09237	10.46512	3.408843	-4.40564	-3.9143	3.527092	6.66748	73.25709
1994q1	AL	0.64803	-3.06183	10.07981	4.18197	-4.45687	-3.01284	4.093532	6.90627	76.2302
1994q2	AL	0.8068	-4.77758	9.667845	4.156533	-4.45687	-0.38345	4.613366	8.698334	71.08569
1994q3	AL	0.935123	-5.87525	9.205335	4.711544	-4.45687	0.557781	6.094711	9.635196	71.81097
1994q4	AL	1.051725	-5.8223	8.729187	6.134942	-4.45687	4.065888	4.55174	10.33396	67.28904
1995q1	AL	1.185585	-6.49175	8.509686	7.007749	-3.70162	3.259667	3.63409	10.20627	65.04417
1995q2	AL	1.448311	-5.30919	8.116896	6.265022	-3.70162	2.447717	3.817497	9.2537	69.51447
1995q3	AL	1.534576	-4.34	8.005348	6.008758	-3.70162	3.325819	3.907717	8.964148	72.68784
1995q4	AL	1.986241	-4.64477	8.056276	5.467092	-3.70162	0.578258	4.116258	8.419457	72.58398
1996q1	AL	2.738192	-4.07921	8.130425	4.748475	-2.35087	2.32258	4.663291	8.389683	76.20307
1996q2	AL	2.465031	-3.32168	8.136497	5.098303	-2.35087	5.477627	3.847268	8.879146	76.07192
1996q3	AL	2.059619	-3.79328	8.18111	5.070381	-2.35087	4.71349	3.499286	8.224299	75.17387
1996q4	AL	1.297611	-3.68887	8.306816	5.129056	-2.35087	4.083828	3.939087	7.3437	79.78761
1997q1	AL	1.388194	-3.0516	8.378648	4.538473	-0.65783	2.326517	2.373248	7.584174	80.56606
1997q2	AL	0.914512	-1.97239	8.293633	4.838821	-0.65783	1.35285	4.59684	7.583118	86.4209
1997q3	AL	1.615035	-2.89681	8.212539	3.338298	-0.65783	1.340819	3.985644	6.534975	88.84785
1997q4	AL	1.920112	-3.48257	7.956761	3.029887	-0.65783	0.82296	4.160687	6.117407	82.47263
1998q1	AL	0.575111	-4.84698	7.866389	4.398223	1.645572	-1.3237	5.442816	5.852667	88.86378
1998q2	AL	0.695576	-4.19353	7.745056	4.37109	1.645572	-2.87901	3.814664	5.633413	89.30112
1998q3	AL	0.5401	-5.08153	7.753087	4.5899	1.645572	-5.83624	4.966795	5.501928	84.80093
1998q4	AL	-0.6729	-5.03532	7.43917	5.509571	1.645572	-6.90909	5.632573	4.983874	90.53914
1999q1	AL	0.260551	-5.39073	7.185666	4.529449	2.045984	-3.39163	4.797613	5.318139	95.68526
1999q2	AL	-0.37641	-5.91965	6.985648	5.226409	2.045984	-2.87066	5.039079	5.813293	98.73927
1999q3	AL	0.280718	-5.39962	6.844463	4.659282	2.045984	1.809926	3.954673	6.272424	96.3895
1999q4	AL	1.678911	-4.53888	6.654724	3.787755	2.045984	5.442386	3.430447	6.633391	98.28857
2000q1	AL	2.73714	-4.56268	6.464885	3.046193	0.927427	6.592219	4.294919	6.901983	99.75917
2000q2	AL	4.134144	-4.69806	6.376729	2.059189	0.927427	6.004341	4.15161	6.300913	100.4269
2000q3	AL	4.914385	-2.78601	6.005367	1.505615	0.927427	5.329621	3.871343	6.175162	102.0298
2000q4	AL	4.842803	-2.99203	6.190802	1.470531	0.927427	2.649205	1.663645	5.880219	100.3803
2001q1	AL	4.471531	-2.15654	6.391371	1.075136	-0.13836	0.364567	1.393089	5.285803	100
2001q2	AL	4.409249	-1.83813	6.824092	0.497417	-0.13836	1.372	1.058425	5.805817	103.0909
2001q3	AL	3.204175	-1.41805	6.793955	1.642492	-0.13836	1.293528	1.927067	5.808712	96.8825
2001q4	AL	3.127496	-2.60176	6.891261	1.16917	-0.13836	1.433995	3.906606	5.560726	99.97867
2002q1	AL	3.087078	-2.46236	6.625985	1.256255	1.295319	2.60858	3.918483	6.037694	101.7084
2002q2	AL	2.838975	-3.69944	6.365936	1.994358	1.295319	2.029265	4.401436	6.172283	97.65529
2002q3	AL	2.58436	-4.13141	6.246527	2.368973	1.295319	1.458373	4.106166	5.647969	89.80309
2002q4	AL	3.053904	-4.76141	6.114477	1.802763	1.295319	2.864079	3.307233	5.517885	88.3084
2003q1	AL	2.479589	-4.87912	6.068	2.290411	1.764506	2.311419	3.374769	5.238139	83.28336
2003q2	AL	2.166507	-5.91091	6.029741	2.58016	1.764506	2.516406	2.547379	5.058907	86.96727
2003q3	AL	2.98478	-5.51641	5.898199	1.831887	1.764506	3.501055	3.14546	5.423203	90.08289
2003q4	AL	3.188218	-5.22457	5.700951	2.061782	1.764506	4.811924	4.360565	5.746692	91.5827
2004q1	AL	4.044984	-5.4915	5.536161	1.498349	1.057714	7.5568	3.825146	5.578812	92.97104
2004q2	AL	4.370857	-5.61009	5.428474	1.142476	1.057714	9.698161	3.894626	5.868857	95.63338
2004q3	AL	4.005608	-6.55206	5.502879	1.434392	1.057714	9.791459	3.082767	5.571818	98.12036
2004q4	AL	3.75518	-6.7961	5.134615	1.661487	1.057714	8.875789	1.958878	5.344596	106.2834
2005q1	AL	3.251386	-6.34002	5.109921	2.368613	1.54521	7.864305	2.345056	5.467404	111.0104
2005q2	AL	3.791418	-5.55855	5.071555	1.905249	1.54521	11.50531	3.335437	5.299484	109.5365
2005q3	AL	4.281316	-5.66766	4.96565	1.348684	1.54521	11.59657	3.332972	5.198432	117.7832
2005q4	AL	4.708287	-5.42738	5.012242	0.921713	1.54521	12.63212	3.636621	5.393989	119.4689
2006q1	AL	4.752246	-5.23855	5.001553	0.864421	1.530024	10.45305	3.097255	5.272268	127.9498
2006q2	AL	4.702936	-5.627	4.865992	1.137064	1.530024	6.313295	2.002144	5.688536	129.6146
2006q3	AL	5.100198	-4.96085	4.700788	1.049802	1.530024	6.430429	2.136462	5.736325	126.6959
2006q4	AL	4.674996	-5.40517	4.549285	1.67167	1.530024	6.414081	2.468003	5.652727	136.0869
2007q1	AL	4.423299	-5.67412	4.481998	1.986701	1.588874	7.541447	3.840861	5.81	143.8634
2007q2	AL	3.64541	-6.39996	4.315347	2.777923	1.588874	5.495278	4.395377	6.01	152.8688
2007q3	AL	2.778038	-6.10275	4.267831	3.941962	1.588874	3.111856	4.753963	6.023334	153.1185
2007q4	AL	3.127914	-6.66251	4.352493	3.988753	1.588874	2.199259	4.380362	6.136667	156.5116
2008q1	AL	3.510502	-6.83683	4.017843	4.079498	1.80906	2.059547	3.401613	6.153333	130.7836
2008q2	AL	6.373653	-4.77777	4.252058	1.426347	1.80906	14.49891	2.775025	6.373333	125.9327

Figure 3. Finland

Data for Figure 3 immediately follows

Data for Figure 3

TIME	COUNTRY	INFLATION	CURRACCTPERGDP	UNEMPRATE	REALINTRATE	FISCBALPERGDP	REALEFFEXRATE	GDP4QCHANGE	BONDRATE	REALEQUITYINDEX
1970q1	FI			1.863566		4.409496	115.1333		7.686666	7.549328
1970q2	FI			2.022436		4.409496	114.0667		7.633333	8.128429
1970q3	FI			1.956104		4.409496	113.5967		8.033334	8.287646
1970q4	FI			1.749419		4.409496	112.4567		7.956666	8.553942
1971q1	FI	5.36294		1.898	1.820393	4.447676	112.4533	1.543356	7.696667	8.55809
1971q2	FI	6.207008		2.275637	1.642992	4.447676	112.5633	4.007779	7.573333	8.683108
1971q3	FI	8.103642		2.365162	0.613024	4.447676	113.19	2.125411	8.68	8.565178
1971q4	FI	9.672403		2.428707	-1.0824	4.447676	110.6767	0.483482	8.616667	8.336083
1972q1	FI	5.606196		2.657749	2.143804	3.759538	105.7667	10.17344	7.966667	9.373771
1972q2	FI	9.599488		2.488476	-1.83949	3.759538	106.9133	4.080407	7.943333	9.698752
1972q3	FI	8.907215		2.594706	-1.13722	3.759538	107.6733	6.240877	8.096666	11.08471
1972q4	FI	8.041276		2.475367	-0.24461	3.759538	107.4133	8.884421	7.853333	11.69737
1973q1	FI	10.26313		2.55521	-2.4498	5.351175	106.5733	7.733516	8.166667	14.39171
1973q2	FI	12.08192		2.359878	-4.20526	5.351175	106.7267	4.480674	8.25	13.98115
1973q3	FI	12.44519		2.296364	-2.37853	5.351175	108.6167	6.746662	8.346666	14.09762
1973q4	FI	17.75277		2.126308	-5.92277	5.351175	109.8433	6.569717	8.273334	14.57594
1974q1	FI	19.64107		1.724813	-8.9244	4.872756	111.6233	2.545425	8.846666	12.81986
1974q2	FI	21.77452		1.56182	-10.7079	4.872756	114.1367	5.878618	8.776667	11.64493
1974q3	FI	19.07577		2.00703	-9.68577	4.872756	116.6533	2.801656	9.063334	11.47482
1974q4	FI	20.59224		1.69751	-10.1189	4.872756	115.61	0.974929	8.476666	9.464219
1975q1	FI	16.64767	-9.76014	1.645408	-6.28433	5.078825	118.8567	3.241844	9.526667	9.290069
1975q2	FI	12.54345	-8.09978	1.71959	-1.03345	5.078825	119.36	2.08478	9.573334	8.772448
1975q3	FI	13.65439	-6.94889	2.567675	-2.37439	5.078825	121.36	-0.04501	9.69	9.311879
1975q4	FI	7.948858	-4.661	3.06029	5.764475	5.078825	122.61	-1.03629	9.713333	8.592727
1976q1	FI	10.87733	-5.4167	3.331129	1.706002	7.811965	126.82	-2.23451	9.833333	8.058706
1976q2	FI	11.03108	-1.92333	3.779144	1.275589	7.811965	127.93	-0.98892	10.37333	7.41122
1976q3	FI	13.28817	-3.62064	4.140504	-1.2015	7.811965	129.7367	1.039671	10.03667	6.930214
1976q4	FI	13.20113	-3.56513	4.126226	-0.6978	7.811965	130.2533	2.84526	10.42333	6.253374
1977q1	FI	9.878094	-0.17934	4.969149	1.545239	6.398666	132.09	1.607691	10.98333	5.95486
1977q2	FI	9.462976	-3.66726	5.710384	1.747025	6.398666	124.25	0.954578	10.90333	5.579103
1977q3	FI	8.96601	1.907135	6.10628	2.627323	6.398666	124.96	0.461782	10.82333	5.181964
1977q4	FI	8.89826	0.301256	6.582394	3.90174	6.398666	120.7667	-0.60251	10.30333	4.650925
1978q1	FI	7.688134	0.478834	7.371797	2.725199	3.939618	116.94	1.340021	10.54333	4.866667
1978q2	FI	8.058181	1.586995	6.954406	-0.24151	3.939618	112.67	2.162676	9.87	4.916307
1978q3	FI	7.400542	2.127245	7.049339	0.392792	3.939618	111.2067	1.982383	9.55	4.679169
1978q4	FI	7.485138	2.882648	7.176382	0.794862	3.939618	111.59	4.367317	9.233334	4.646465
1979q1	FI	8.137616	0.92377	6.755427	-0.53762	3.53771	112.1133	5.299793	9.476666	5.121743
1979q2	FI	7.998275	0.748092	5.812382	-0.35494	3.53771	113.1133	6.944461	9.54	5.278097
1979q3	FI	7.877823	-1.20558	5.561802	-0.10449	3.53771	113.1	7.361795	9.49	5.715031
1979q4	FI	8.518595	-1.79032	5.174121	2.548072	3.53771	114.78	6.39994	9.49	5.369586
1980q1	FI	10.03647	-2.50035	4.584788	1.016864	3.839908	114.9733	6.050187	10.20333	5.416358
1980q2	FI	10.23195	-3.69451	4.516972	1.811387	3.839908	118.1667	3.233627	10.51667	5.44946
1980q3	FI	8.448307	-3.5543	4.688677	4.608359	3.839908	118.8167	7.247852	10.49667	5.246358
1980q4	FI	8.925395	-1.22352	4.620516	4.187939	3.839908	120.14	3.303091	10.47	4.742115
1981q1	FI	11.02411	0.453723	4.60183	2.08256	5.237211	120.4767	1.454554	10.96	4.672483
1981q2	FI	10.12195	-1.53129	4.958588	0.684716	5.237211	121.6667	3.08821	10.97667	4.837916
1981q3	FI	12.02094	-1.04053	5.331353	-1.23428	5.237211	122.2467	-1.28509	10.99	4.835963
1981q4	FI	10.80226	-1.01598	5.3407	0.654407	5.237211	122.9033	1.864627	11.01	4.864876
1982q1	FI	8.617564	0.411478	5.501201	2.892436	3.152068	125.48	2.673353	11.19	5.431528
1982q2	FI	8.889179	-0.99235	5.386015	2.634154	3.152068	127.7933	2.489834	11.01667	6.037605
1982q3	FI	8.656934	-2.62373	5.284056	2.333066	3.152068	129.0833	3.075836	10.84	6.114484
1982q4	FI	8.352704	-3.36777	5.417658	4.853963	3.152068	116.8467	3.941697	10.90333	5.987203
1983q1	FI	7.711507	-2.26082	5.511816	4.771826	1.585473	117.27	3.438141	10.62333	6.70945
1983q2	FI	7.90375	-1.68845	5.764789	6.292917	1.585473	120.2633	3.502203	10.66667	7.753518
1983q3	FI	8.10012	-2.38598	5.189109	7.06988	1.585473	122.2433	3.337135	10.67333	8.826948
1983q4	FI	8.210662	-1.9974	5.391434	8.299338	1.585473	121.9333	1.83381	11.07667	9.807488
1984q1	FI	8.524595	0.98409	5.197237	8.975405	3.327022	122.5833	3.283199	11.14	10.86658
1984q2	FI	8.488474	0.175292	5.477904	8.224859	3.327022	124.7167	2.373784	11.22333	11.19876
1984q3	FI	8.312187	-0.61739	5.077776	8.037813	3.327022	125.3133	2.347941	11.07667	10.84744
1984q4	FI	7.282522	-0.17925	5.202061	8.154144	3.327022	124.8367	3.764345	11.02333	10.11056
1985q1	FI	6.392376	-0.95803	4.994464	7.870957	3.461502	124.4233	2.885198	10.71667	9.224911
1985q2	FI	5.492334	-0.64141	5.048304	8.351	3.461502	126.4067	3.87139	10.60333	8.233114
1985q3	FI	4.277964	0.200095	5.061331	9.102036	3.461502	127.6033	3.47998	10.60333	8.333488
1985q4	FI	4.985124	-3.87618	5.175077	7.384876	3.461502	127.4067	2.474761	10.68	9.244851
1986q1	FI	5.288926	-3.26229	5.482773	6.127741	3.910072	126.8533	1.848079	9.49	9.969241
1986q2	FI	4.524036	0.228555	5.486955	6.825964	3.910072	126.1267	1.160669	8.756667	11.68962
1986q3	FI	3.551851	-1.19329	5.36589	12.72482	3.910072	125.22	4.928981	8.63	13.90395
1986q4	FI	5.344463	0.413285	5.261554	6.555537	3.910072	125.0767	2.868452	8.78	15.34436
1987q1	FI	3.569255	-1.86406	5.441463	7.740745	1.641426	127	3.571805	7.83	16.56417
1987q2	FI	5.164632	-1.39866	5.120707	4.708701	1.641426	128.5667	4.864515	7.816667	18.43872
1987q3	FI	5.68273	-1.19048	4.890022	3.870604	1.641426	128.8	0.985793	7.853333	21.42853
1987q4	FI	4.518325	-3.05541	5.017681	4.875009	1.641426	129.4233	4.828931	8.136666	20.47572
1988q1	FI	7.205131	-1.7791	4.816261	2.178203	5.216558	131.57	5.330554	10.14	19.88074
1988q2	FI	7.655453	-2.16921	4.748787	1.67788	5.216558	133.2167	4.40448	10.19667	24.21492
1988q3	FI	7.131009	-4.27141	4.400146	2.852325	5.216558	131.8767	5.241201	10.63667	26.22185
1988q4	FI	8.346272	-1.77499	4.253694	2.81706	5.216558	133.5667	5.123538	11.25667	24.33364
1989q1	FI	7.49961	-2.75555	4.64252	3.520391	6.783159	135.54	5.04573	11.69667	25.09755
1989q2	FI	5.797571	-4.63821	4.417056	6.082429	6.783159	141.1133	5.987228	11.97667	25.55902
1989q3	FI	5.516149	-6.49722	4.538179	6.797184	6.783159	140.9433	5.934692	12.06667	24.5054
1989q4	FI	4.663874	-5.57472	4.126877	10.34946	6.783159	141.05	4.148774	12.60333	20.39518
1990q1	FI	5.19195	-3.8984	4.081755	10.62138	5.356049	143.4233	2.908609	12.91593	21.04775
1990q2	FI	4.653563	-4.94745	4.40103	8.423103	5.356049	143.79	0.578402	13.21667	18.41426
1990q3	FI	6.197272	-5.34323	4.660323	6.486062	5.356049	143.9667	-1.00789	13.33	16.39293
1990q4	FI	4.279506	-5.80221	5.087563	10.13383	5.356049	142.3667	-1.88973	13.37333	12.71448
1991q1	FI	1.28504	-6.23411	5.805172	13.03163	-0.95156	141.6533	-4.46322	12.72667	12.39036
1991q2	FI	2.154376	-5.78783	7.389209	10.24562	-0.95156	139.79	-5.81649	11.61333	13.97018
1991q3	FI	2.363315	-4.35352	8.980046	9.296685	-0.95156	135.04	-7.02571	11.10333	12.14817
1991q4	FI	2.276321	-4.85057	10.0282	11.66368	-0.95156	128.4367	-8.0225	11.40333	10.57448
1992q1	FI	1.782225	-5.45605	11.41161	10.34111	-5.43619	121.4633	-5.18364	11.39333	12.13043
1992q2	FI	0.982437	-4.9113	12.46163	12.89756	-5.43619	121.1733	-3.98699	11.95667	11.87695
1992q3	FI	1.378861	-4.10608	13.58931	13.77447	-5.43619	118.9967	-4.30451	12.85333	9.81572
1992q4	FI	0.432385	-3.87447	14.68896	11.41762	-5.43619	107.9367	-2.30035	11.68667	11.92601
1993q1	FI	2.90412	-3.37284	16.22366	6.672547	-8.27398	99.21333	-2.93744	10.35333	14.32565
1993q2	FI	2.756168	-1.33213	17.67879	5.443831	-8.27398	100.1833	-2.6606	9.43	17.45395
1993q3	FI	0.538067	-0.52011	17.9795	6.328599	-8.27398	98.32333	0.840737	8.153334	20.46381
1993q4	FI	-0.03978	0.100451	18.59421	6.48978	-8.27398	99.53667	1.018518	7.363333	23.80865
1994q1	FI	-1.12302	1.730458	18.87847	6.059691	-6.74471	102.4633	2.70061	6.856667	28.78036
1994q2	FI	-0.31769	2.025661	18.50048	5.611028	-6.74471	102.6067	4.370662	8.78	28.01311
1994q3	FI	1.56502	1.680185	17.39809	4.098314	-6.74471	105.5267	3.731672	10.33667	29.42253
1994q4	FI	4.497942	-0.97384	16.70971	1.008724	-6.74471	111.73	2.943394	10.17333	29.66647
1995q1	FI	4.899384	4.245203	16.75023	1.067283	-6.15623	113.2233	3.634468	10.21333	28.24381
1995q2	FI	5.587342	4.376891	16.33218	0.365991	-6.15623	115.2867	3.503655	8.983334	28.76879
1995q3	FI	5.779123	2.455968	16.96543	0.27421	-6.15623	116.6667	3.098981	8.353333	35.07999
1995q4	FI	3.647619	5.272253	16.7546	1.379047	-6.15623	116.58	4.817653	7.616667	30.10243
1996q1	FI	2.12127	3.351485	16.35171	2.042063	-3.5229	111.9267	3.297232	7.47	27.72191
1996q2	FI	0.259743	5.415467	15.80566	3.506924	-3.5229	108.68	3.310886	7.346667	30.95785
1996q3	FI	-1.30394	3.707181	15.8913	4.787274	-3.5229	111.61	3.592618	7.05	23.26946
1996q4	FI	-1.52343	3.506647	15.43075	4.610099	-3.5229	110.9567	4.470224	6.44	26.1395
1997q1	FI	0.717964	3.940183	13.51471	2.352036	-1.22681	108.8333	5.212538	6.056667	31.26701
1997q2	FI	0.817684	5.773234	13.30551	2.258983	-1.22681	106.9967	5.663693	6.203333	33.36507
1997q3	FI	1.913282	6.452487	12.10168	1.260051	-1.22681	105.1767	6.751007	5.863333	38.35844
1997q4	FI	2.999973	6.015602	11.91642	0.606694	-1.22681	106.42	6.196039	5.706666	38.112
1998q1	FI	3.608	6.006396	11.78597	-0.15133	1.673679	105.8933	5.743718	5.166667	41.15121
1998q2	FI	4.257689	6.019379	12.01305	-0.55436	1.673679	106.43	5.890159	5.013333	51.31251
1998q3	FI	3.559944	5.282664	11.23257	0.046723	1.673679	107.6767	5.030567	4.663333	51.26816
1998q4	FI	2.888308	5.078884	10.70742	0.618358	1.673679	108.96	3.802361	4.306667	48.97276
1999q1	FI	0.817587	4.58957	10.50425	2.275746	1.639905	106.5133	4.247	4.07	64.64498
1999q2	FI	0.422507	6.492528	10.48997	2.21416	1.639905	104.8	3.196656	4.296667	74.03773
1999q3	FI	1.116297	6.742546	10.01462	1.587036	1.639905	103.34	3.199398	5.126667	81.04153
1999q4	FI	0.884359	7.007907	10.04938	2.545641	1.639905	102.38	4.722331	5.396667	109.1319
2000q1	FI	1.974502	8.068958	10.49051	1.567865	6.937951	101.4	4.807212	5.653333	164.2307
2000q2	FI	2.547126	6.57279	9.791739	1.71324	6.937951	100.13	5.185643	5.48	167.9774
2000q3	FI	2.373321	10.41292	9.562547	2.364279	6.937951	99.53667	5.443395	5.466667	148.1326
2000q4	FI	3.320604	7.371417	9.428552	1.701629	6.937951	98.94334	3.958168	5.33	133.2712
2001q1	FI	3.322912	9.770607	9.188534	1.423355	5.033273	102.2833	4.354781	4.993333	100
2001q2	FI	3.331117	7.31792	9.001957	1.263949	5.033273	101.3367	2.857765	5.216667	95.56763
2001q3	FI	2.713992	7.78906	9.163916	1.553808	5.033273	101.96	1.704359	5.13	68.73792
2001q4	FI	2.180815	9.491015	9.249382	1.261718	5.033273	102.2367	1.013608	4.833333	78.33949
2002q1	FI	1.637858	9.32529	9.058908	1.724609	4.157435	101.8833	0.014693	5.16	82.61859
2002q2	FI	1.096097	9.161055	9.13558	2.34937	4.157435	102.83	1.558869	5.326667	65.98219
2002q3	FI	1.32424	8.610957	9.172318	2.033093	4.157435	103.8033	1.704794	4.84	53.95227
2002q4	FI	1.127317	8.289186	9.073288	1.981617	4.157435	104.3067	3.029387	4.596667	59.45933
2003q1	FI	-0.4891	5.351872	9.028624	3.172667	2.409456	106.25	1.710141	4.136667	52.95304
2003q2	FI	-0.10997	6.584614	9.173509	2.474538	2.409456	108.0633	1.663702	3.946667	54.52626
2003q3	FI	-0.48963	5.074245	8.990986	2.628868	2.409456	107.14	2.335517	4.13	56.44184
2003q4	FI	-0.49029	3.640916	8.989054	2.639825	2.409456	107.67	1.813993	4.326667	60.86678
2004q1	FI	1.242633	6.987546	8.941817	0.820867	2.176737	108.47	3.636249	4.063334	67.00787
2004q2	FI	0.424592	5.294075	9.079889	1.657475	2.176737	106.4633	3.61409	4.276667	57.5091
2004q3	FI	1.116019	6.147048	8.754156	1.000281	2.176737	106.94	3.273957	4.236667	54.43494
2004q4	FI	0.542531	7.706081	8.629	1.621069	2.176737	107.8833	4.277326	3.86	60.89026
2005q1	FI	0.125479	4.98085	8.749921	2.014855	2.673759	107.6167	2.955799	3.63	63.88633
2005q2	FI	0.31082	2.09376	8.370495	1.81378	2.673759	106.1833	2.252556	3.333333	67.40363
2005q3	FI	-0.46388	4.256936	8.192031	2.594209	2.673759	105.2933	3.705174	3.143333	73.39142
2005q4	FI	0.610875	3.081682	8.358789	1.732592	2.673759	104.99	2.708518	3.296667	76.03462
2006q1	FI	0.723141	5.453	7.993033	1.888426	4.001626	105.08	4.530972	3.446667	85.56625
2006q2	FI	1.113775	6.206392	7.747608	1.775725	4.001626	105.9567	5.531255	3.946667	87.55686
2006q3	FI	2.106053	4.897571	7.698262	1.115314	4.001626	106.2733	4.096463	3.933333	83.39624
2006q4	FI	2.116347	1.60663	7.557524	1.47812	4.001626	107.0233	4.611028	3.803333	88.82404
2007q1	FI	2.445374	3.662544	7.131401	1.37496	5.339425	107.79	4.638491	4.036667	95.36285
2007q2	FI	2.69001	3.859997	6.543769	1.374823	5.339425	108.85	4.404899	4.383333	104.3055
2007q3	FI	2.843556	6.399561	6.957458	1.656944	5.339425	109.0333	4.195725	4.44	107.6183
2007q4	FI	3.002788	3.315641	6.897218	1.721979	5.339425	110.1433	4.085511	4.313334	110.475
2008q1	FI	3.409777	4.306506	6.16768	1.070223	4.603198	112.22	2.701946	4.066667	95.17308
2008q2	FI	3.2038	2.830886	6.130591	1.656666	4.603198	113.8033	2.400279	4.49	87.15093

Figure 4. Greece

Data for Figure 4 immediately follows

Data for Figure 4

TIME	COUNTRY	INFLATION	CURRACCTPERGDP	UNEMPRATE	REALINTRATE	FISCBALPERGDP	REALEFFEXRATE	GDP4QCHANGE	BONDRATE	REALEQUITYINDEX
1970q1	GC			2.7		0.633685	115.5233
1970q2	GC			2.7		0.633685	116.8333
1970q3	GC			2.7		0.633685	114.1033
1970q4	GC			2.7		0.633685	114.4333
1971q1	GC	4.375167		2.3	3.624833	0.097191	112.5533	7.514193
1971q2	GC	1.489431		2.3	6.510569	0.097191	113.2	6.180615
1971q3	GC	4.331009		2.3	3.668991	0.097191	107.8733	8.861747
1971q4	GC	1.472137		2.3	6.527863	0.097191	105.5433	7.600164
1972q1	GC	2.352015		2	5.647985	0.010059	100.8767	9.955164
1972q2	GC	6.149515		2	1.850485	0.010059	101.5567	10.606
1972q3	GC	3.648921		2	4.351079	0.010059	98.65	5.426056
1972q4	GC	7.404133		2	0.595867	0.010059	101.3633	12.69144
1973q1	GC	12.72256		1.8	-4.72256	-0.03426	97.16666	8.108819
1973q2	GC	13.35538		1.8	-5.35538	-0.03426	95.13	8.572552
1973q3	GC	20.20755		1.8	-10.2076	-0.03426	90.78	9.789086
1973q4	GC	28.09826		1.8	-18.0983	-0.03426	108.5733	4.752144
1974q1	GC	25.30459		1.5	-13.9713	-1.20664	114.8933	2.361952
1974q2	GC	24.85468		1.5	-12.8547	-1.20664	110.3567	-6.4506
1974q3	GC	21.74271		1.5	-9.74271	-1.20664	110.28	-13.7757
1974q4	GC	12.22326		1.5	-0.22326	-1.20664	109.1733	-9.0734
1975q1	GC	11.18067		1.3	0.819325	-2.6205	104.6967	0.604345
1975q2	GC	11.37617		1.3	0.623831	-2.6205	104.7	4.998348
1975q3	GC	11.40191		1.3	0.598087	-2.6205	98.09	9.899026
1975q4	GC	14.63464		1.3	-3.13464	-2.6205	100.0167	9.51137
1976q1	GC	17.19827	-3.60799	1.1	-5.69827	-1.47569	101.69	5.0946
1976q2	GC	15.77591	-2.10275	1.1	-4.27591	-1.47569	103.24	6.62174
1976q3	GC	15.01851	-4.93854	1.1	-3.51851	-1.47569	99.96	5.935426
1976q4	GC	12.92833	-1.73931	1.1	-1.42833	-1.47569	100.3633	8.756418
1977q1	GC	12.18422	-1.93217	0.8	-0.18422	-2.2453	99.49	5.061862
1977q2	GC	12.33678	-4.35852	0.8	-0.33678	-2.2453	101.3167	0.828836
1977q3	GC	12.97277	-3.09287	0.8	-0.97277	-2.2453	100.7067	3.706903
1977q4	GC	14.0626	-2.95132	0.8	-2.0626	-2.2453	103.1	2.028908
1978q1	GC	13.35853	-2.63845	1	-1.35853	-2.59323	99.15	6.339612
1978q2	GC	13.85386	-1.96565	1	-1.02053	-2.59323	99.20667	8.460502
1978q3	GC	12.80054	-4.58996	1	1.699458	-2.59323	93.62334	4.869567
1978q4	GC	11.71216	0.101556	1	2.787845	-2.59323	93.92	8.217651
1979q1	GC	15.72929	-2.93351	1	-1.22929	-2.14545	98.01667	4.793045		52.1791
1979q2	GC	16.36569	-3.5802	1	-1.36569	-2.14545	100.6767	5.825962		48.57745
1979q3	GC	19.46182	-5.93195	1	-2.12849	-2.14545	98.69666	3.544289		43.81141
1979q4	GC	21.84661	-2.01013	1	-1.84661	-2.14545	100.14	-1.13365		38.71864
1980q1	GC	15.97191	-3.51838	1.9	4.028088	-2.33728	99.71	1.799585		36.98579
1980q2	GC	18.39823	-4.45833	1.9	1.601767	-2.33728	95.98	0.432371		32.94622
1980q3	GC	17.44952	-3.87694	1.9	5.050482	-2.33728	93.21	0.55456		31.29806
1980q4	GC	18.60603	-4.09264	1.9	3.893969	-2.33728	98.64	-0.11407		28.17659
1981q1	GC	20.74445	-4.04576	3.2	1.75555	-7.76064	99.45667	-5.45096		26.25215
1981q2	GC	18.42179	-4.8966	3.2	3.411543	-7.76064	100.2567	-5.7563		25.57629
1981q3	GC	19.48859	-5.5825	3.2	1.011408	-7.76064	99.28333	2.447088		21.57941
1981q4	GC	18.87671	-4.3506	3.2	1.623289	-7.76064	104.9133	2.512815		20.04377
1982q1	GC	24.17798	-2.28438	4.9	-8.92798	-6.53827	105.3967	2.549203		19.41894
1982q2	GC	25.6389	-1.76745	4.9	-10.3889	-6.53827	106.82	0.588335		17.53004
1982q3	GC	24.58227	-7.14821	4.9	-9.33227	-6.53827	102.7733	-3.25283		17.42081
1982q4	GC	22.65031	-3.12412	4.9	-7.40031	-6.53827	106.5167	-4.39185		16.7672
1983q1	GC	18.98644	-5.79113	7	-3.73644	-6.74796	94.27	-3.64931		15.56667
1983q2	GC	18.41751	-1.19482	7	-3.16751	-6.74796	100.3467	-2.62426		12.93504
1983q3	GC	18.23139	-5.94703	7	-2.98139	-6.74796	99.56667	0.732432		11.11493
1983q4	GC	18.94271	-2.91152	7	-3.69271	-6.74796	97.73333	1.203665		9.971746
1984q1	GC	20.56182	-5.6914	7.3	-3.47849	-7.55571	95.61333	1.763945		8.650173
1984q2	GC	19.77643	-3.44203	7.3	-1.77643	-7.55571	95.41333	2.315685		8.877177
1984q3	GC	19.99539	-4.16558	7.3	-1.99539	-7.55571	94.75333	2.982373		8.357649
1984q4	GC	19.0944	-5.05262	7.3	-1.0944	-7.55571	94.89333	0.918458		8.238446
1985q1	GC	16.47105	-8.6371	7	1.528952	-10.3731	97.01334	-1.15644		8.019021
1985q2	GC	15.52798	-7.27722	7	2.972025	-10.3731	94.91333	1.621091	16.55	8.542214
1985q3	GC	16.2846	-7.65038	7	2.215399	-10.3731	92.32	3.31653	14.17	8.159039
1985q4	GC	20.36596	-5.51612	7	-1.86596	-10.3731	82.41666	5.933843	14.01	8.239832
1986q1	GC	18.56163	-5.11026	6.6	-0.06163	-8.58785	83.68667	2.065651	14.94	9.990805
1986q2	GC	18.55112	-3.7447	6.6	-0.05112	-8.58785	85.74	4.55223	16.98	9.676149
1986q3	GC	18.2953	-3.15678	6.6	0.204704	-8.58785	84.91333	-1.60953	16.59	11.11894
1986q4	GC	14.72629	-1.0223	6.6	3.773713	-8.58785	86.52333	-2.73705	14.6167	13.0378
1987q1	GC	14.15016	-2.9695	6.5	4.349842	-8.56088	85.58667	-0.52894	17.4567	16.76694
1987q2	GC	15.45881	-3.82176	6.5	3.041187	-8.56088	87.68667	-5.08277	17.3567	19.89651
1987q3	GC	13.74765	1.206577	6.5	5.75235	-8.56088	85.37666	-3.3127	16.9133	31.76418
1987q4	GC	13.45775	-1.99395	6.5	6.042251	-8.56088	87.38667	-0.27934		43.51256
1988q1	GC	15.65649	-3.24607	6.9	3.843509	-10.3398	86.65	6.378316	20.39	34.11219
1988q2	GC	14.54593	-1.38966	6.9	4.787407	-10.3398	88.90667	4.50824	17.0233	33.45033
1988q3	GC	15.93972	0.68682	6.9	3.060281	-10.3398	88.07333	4.946814	14.8667	30.75637
1988q4	GC	15.80183	-0.87207	6.9	3.19817	-10.3398	89.94666	1.032237	13.9667	30.07585
1989q1	GC	13.726	-1.59234	6.6	4.773997	-12.1448	88.49333	2.188736		27.15125
1989q2	GC	13.00579	-3.66384	6.6	5.994206	-12.1448	88.69334	4.856208		28.9513
1989q3	GC	13.59865	-4.53931	6.6	5.401354	-12.1448	89.05666	2.735199		34.45883
1989q4	GC	13.68128	-3.53314	6.6	5.985388	-12.1448	91.16666	5.131104		43.2026
1990q1	GC	15.34573	-6.74783	6.2	5.65427	-14.04	91.13333	2.636903		49.53457
1990q2	GC	18.25633	-2.96301	6.2	4.74367	-14.04	93.18	0.928308		88.09135
1990q3	GC	20.18634	-3.5779	6.2	3.813658	-14.04	95.44666	-4.78163		110.0204
1990q4	GC	21.28539	-1.99148	6.2	2.714611	-14.04	97.28333	0.940544		71.39801
1991q1	GC	19.87372	-4.81696	6.9	3.792942	-9.86338	94.13	0.426262		77.88007
1991q2	GC	18.67562	-0.77605	6.9	4.824379	-9.86338	94.28333	1.517016		74.82474
1991q3	GC	17.0473	0.975685	6.9	6.452698	-9.86338	94.44334	10.4435		61.85096
1991q4	GC	16.65718	-1.15226	6.9	6.009485	-9.86338	97.84333	0.145311		51.4688
1992q1	GC	15.81245	-1.47334	7.8	6.354218	-10.9327	97.45667	1.913787		54.84745
1992q2	GC	13.57965	-1.01878	7.8	7.753689	-10.9327	96.95333	0.532668		49.87881
1992q3	GC	12.84634	-4.75424	7.8	8.153656	-10.9327	96.19334	0.236297		43.70992
1992q4	GC	13.24004	-0.50352	7.8	9.093291	-10.9327	99.41333	0.081645	24.3333	33.98803
1993q1	GC	14.03025	1.114197	8.8	8.469748	-11.9394	98.86333	-4.80136	24.5	40.69739
1993q2	GC	14.97302	-1.95443	8.8	6.906978	-11.9394	100.0933	0.007631	23.88	38.14705
1993q3	GC	13.43118	2.137272	8.8	7.028821	-11.9394	96.89	-1.18864	22.46	41.82566
1993q4	GC	11.46988	-4.07506	8.8	8.780123	-11.9394	99.09333	-0.45595	22.25	41.84963
1994q1	GC	10.60534	1.762642	8.8	8.687998	-8.2624	98.03667	1.438143	21.21	51.1623
1994q2	GC	10.21105	-3.08708	8.8	9.288945	-8.2624	99.03333	0.954054	20.3767	43.89162
1994q3	GC	11.2769	0.357714	8.8	8.766434	-8.2624	99.31	3.261119	21.3767	38.12394
1994q4	GC	10.2281	0.068646	8.8	8.231898	-8.2624	101.2567	2.236993	19.8333	36.85027
1995q1	GC	10.53053	-0.17166	8.3	6.596135	-9.07015	101.6333	2.684566	18.5833	35.12799
1995q2	GC	9.883596	-3.74963	8.3	6.286404	-9.07015	103.7333	0.91374	17.6067	36.55163
1995q3	GC	8.761712	-4.93238	8.3	6.041621	-9.07015	102.27	0.54318	16.21	38.7485
1995q4	GC	8.303927	0.059263	8.3	5.679406	-9.07015	103.4633	4.138996	15.4367	36.48309
1996q1	GC	7.442498	-1.61294	9	6.057502	-6.64392	103.3233	2.219078	15.1667	38.69093
1996q2	GC	7.535429	-4.88895	9	5.764571	-6.64392	107.45	3.244721	14.8733	36.04818
1996q3	GC	6.980716	-5.32265	9	5.785951	-6.64392	107.08	3.158334	14.4333	35.00152
1996q4	GC	6.617866	-1.421	9	5.182135	-6.64392	109.0633	0.744716	13.26	34.7881
1997q1	GC	7.45722	-2.80553	8.9	3.21278	-5.89343	108.02	3.909662	9.8	44.53544
1997q2	GC	6.671446	-4.69803	8.9	3.178554	-5.89343	108.2167	3.763419	9.583333	55.99662
1997q3	GC	6.319599	-6.27849	8.9	3.213735	-5.89343	106.08	2.869187	9.49	57.50151
1997q4	GC	5.932034	-0.52712	8.9	5.434633	-5.89343	109.96	3.758688	10.18	55.44655
1998q1	GC	4.764303	-3.07287	10.6	7.435697	-3.82035	108.09	0.585588	10.44333	53.97635
1998q2	GC	5.51124	-3.32782	10.6	5.855426	-3.82035	104.4	3.364925	7.9	83.88277
1998q3	GC	5.447586	-4.1908	10.6	6.652414	-3.82035	105.8567	4.833369	7.826667	83.69607
1998q4	GC	4.617391	-0.42655	10.6	6.015942	-3.82035	107.5233	4.340414	7.756667	77.61357
1999q1	GC	3.911939	-2.04858	11.6	5.254728	-3.09625	108.33	4.083339	6.1	110.1376
1999q2	GC	2.800396	-4.62155	11.6	5.899603	-3.09625	107.8767	3.059175	5.9	127.9723
1999q3	GC	2.393171	-7.28356	11.6	6.406829	-3.09625	105.0867	4.443617	6.566667	164.8402
1999q4	GC	2.854781	-6.88331	11.6	5.911885	-3.09625	104.6033	1.888136	6.666667	182.8247
2000q1	GC	2.939444	-8.0595	11	0.602923	-3.7342	101.64	5.648336	6.433333	167.5415
2000q2	GC	3.516715	-7.39896	11	0.743651	-3.7342	100.7867	4.932096	6.133333	144.3021
2000q3	GC	3.115461	-6.97504	11	1.622139	-3.7342	98.2	2.039131	6.066667	127.1999
2000q4	GC	3.708155	-8.34171	11	1.314079	-3.7342	99.38	4.971483	5.8	110.3761
2001q1	GC	3.128195	-5.99637	10.5	1.618072	-4.44551	100.54	4.825421	5.326667	100
2001q2	GC	2.68716	-5.96875	10.5	1.907906	-4.44551	101.0133	4.437603	5.47	95.52375
2001q3	GC	2.631445	-7.8544	10.5	1.636355	-4.44551	100.1833	4.1963	5.386667	80.20731
2001q4	GC	2.287095	-8.82782	10.5	1.155439	-4.44551	102.2933	4.125198	5.033333	80.15099
2002q1	GC	4.057519	-6.06623	9.8	-0.69505	-4.80563	102.1233	3.766428	5.353333	75.75347
2002q2	GC	3.671781	-6.93934	9.8	-0.22631	-4.80563	103.98	3.877528	5.463333	68.47961
2002q3	GC	3.443734	-3.45094	9.8	-0.0864	-4.80563	103.5333	3.817613	4.963333	62.73789
2002q4	GC	3.362477	-9.48817	9.8	-0.25354	-4.80563	105.9867	3.855344	4.71	54.39096
2003q1	GC	3.712858	-6.7406	10	-1.02929	-5.75334	107.7733	4.746326	4.31	48.07734
2003q2	GC	3.129773	-6.34879	10	-0.76521	-5.75334	111.13	4.774176	4.07	50.99581
2003q3	GC	3.251119	-4.03655	10	-1.11189	-5.75334	108.9	5.055304	4.243333	61.47617
2003q4	GC	3.528328	-9.18244	10	-1.3788	-5.75334	111.4667	5.072358	4.446667	62.36549
2004q1	GC	2.207689	-5.52488	9.5	-0.14419	-7.41477	112.2233	4.691278	4.296667	69.80656
2004q2	GC	3.101836	-5.93777	9.5	-1.01977	-7.41477	112.43	4.588762	4.463333	68.70468
2004q3	GC	3.916609	-3.13994	9.5	-1.80031	-7.41477	110.9367	4.36239	4.313334	65.08614
2004q4	GC	4.17416	-8.56718	9.5	-2.01056	-7.41477	113.8233	4.269032	3.95	73.41035
2005q1	GC	3.577044	-7.52042	9.3	-1.43671	-5.22081	113.6533	3.795317	3.766667	82.59688
2005q2	GC	3.905417	-6.01685	9.3	-1.78082	-5.22081	113.9233	3.796112	3.6	81.10572
2005q3	GC	2.691889	-5.38225	9.3	-0.56156	-5.22081	112.0433	3.732754	3.41	89.97923
2005q4	GC	2.722074	-10.5331	9.3	-0.37861	-5.22081	113.6433	3.725898	3.563333	93.87155
2006q1	GC	3.543777	-13.5374	8.7	-0.93221	-3.07459	113.1967	3.943721	3.773333	109.9444
2006q2	GC	2.748322	-11.0798	8.7	0.141178	-3.07459	115.0433	4.044767	4.28	102.9419
2006q3	GC	3.771988	-7.35027	8.7	-0.55062	-3.07459	114.3733	4.242849	4.193333	101.2018
2006q4	GC	3.319594	-12.3863	8.7	0.274873	-3.07459	116.2167	4.368165	4.033333	111.06
2007q1	GC	3.439385	-14.0106	8.1	0.380948	-3.74762	116.12	4.476824	4.26	119.5608
2007q2	GC	3.001698	-12.8882	8.1	1.063136	-3.74762	117.94	4.066119	4.57	125.4224
2007q3	GC	2.384235	-11.542	8.1	2.116266	-3.74762	117.2167	3.919513	4.656667	128.0036
2007q4	GC	2.550042	-18.0799	8.1	2.174724	-3.74762	120.34	3.401945	4.513333	132.2379
2008q1	GC	3.163825			1.316175	-2.83941	121.13	3.175527	4.393333	104.4137
2008q2	GC	3.060807			1.799659	-2.83941	124.2967	3.515809	4.816667	98.91383

Figure 5. Italy

Data for Figure 5 immediately follows

Data for Figure 5

TIME	COUNTRY	INFLATION	CURRACCTPERGDP	UNEMPRATE	REALINTRATE	FISCBALPERGDP	REALEFFEXRATE	GDP4QCHANGE	BONDRATE	REALEQUITYINDEX
1970q1	IT			3.994103		-3.2332	124.95		7.06	101.8884
1970q2	IT			3.885765		-3.2332	124.48		7.773334	94.74144
1970q3	IT			4.144036		-3.2332	124.61		8.086667	86.35113
1970q4	IT			3.975244		-3.2332	125.76		8.013333	80.04685
1971q1	IT	8.999442	1.516423	3.92204	-2.66611	-4.73139	124.77	2.301156	7.056667	74.82819
1971q2	IT	6.344412	0.385725	3.9352	-0.74775	-4.73139	123.2067	1.994926	6.99	67.51132
1971q3	IT	5.687911	2.244205	3.914499	-0.09458	-4.73139	121.5033	1.462601	7.123333	63.62977
1971q4	IT	5.914759	1.102522	4.233778	-0.40809	-4.73139	120.7267	1.913783	6.816667	59.39648
1972q1	IT	6.092136	2.270487	4.557052	-0.48547	-6.86338	120.0633	3.536957	6.673333	57.88908
1972q2	IT	5.917017	2.496682	4.604397	-0.89368	-6.86338	120.38	3.070534	6.473333	58.97651
1972q3	IT	5.375107	0.698453	4.914841	-0.59177	-6.86338	121.2567	2.955543	6.543334	60.29989
1972q4	IT	5.952105	0.171311	4.766084	-0.66544	-6.86338	122.6367	2.866729	6.676667	62.01448
1973q1	IT	8.509714	-0.44682	4.776753	-2.34305	-6.383	119.5067	2.665421	6.78	60.35135
1973q2	IT	11.87515	-2.00304	5.473915	-5.74515	-6.383	110.0567	5.663405	6.796667	73.0463
1973q3	IT	14.77848	-2.07833	4.392504	-7.15181	-6.383	107.2633	7.456456	6.993333	70.688
1973q4	IT	13.19264	-2.0997	4.126938	-5.41264	-6.383	108.7767	9.39559	7.106667	66.28029
1974q1	IT	14.96938	-4.36653	4.053973	-5.68938	-6.26175	106.3667	9.30586	7.37	65.56958
1974q2	IT	16.43653	-4.96698	3.624146	-2.2732	-6.26175	104.2733	7.303727	8.856667	60.80548
1974q3	IT	19.30224	-4.98319	3.979457	-1.73224	-6.26175	107.0633	4.338087	10.67667	45.08427
1974q4	IT	22.64265	-2.9601	4.106298	-5.37598	-6.26175	106.48	-0.18771	11.54333	38.05231
1975q1	IT	19.16936	-0.43377	4.014184	-5.38269	-10.3171	106.1133	-2.75035	10.56667	37.78999
1975q2	IT	16.61317	1.265911	4.423538	-5.89317	-10.3171	107.2133	-3.75249	10.13667	36.643
1975q3	IT	13.5755	-0.78976	4.248775	-3.95217	-10.3171	107.8067	-2.50765	9.983334	29.76084
1975q4	IT	11.94231	-1.26386	4.560122	-3.53231	-10.3171	108.1967	0.718986	9.47	28.14071
1976q1	IT	11.51592	-1.13462	4.69258	-0.69592	-7.90969	99.01	4.220392	10.18667	29.12809
1976q2	IT	16.20879	-2.20512	4.930724	1.771212	-7.90969	92.44	6.063326	12.83	24.42269
1976q3	IT	17.22123	-0.68207	4.966324	-0.33789	-7.90969	96.72	7.16161	13.21333	25.05269
1976q4	IT	19.85482	-1.33576	5.106074	-2.82816	-7.90969	96.89667	7.767299	14.39667	20.76582
1977q1	IT	21.27517	-0.22113	5.078325	-5.36184	-6.98452	96.44	6.060414	14.98667	19.13103
1977q2	IT	17.62976	0.777102	5.169799	-2.39976	-6.98452	96.68667	3.710676	15.32	16.945
1977q3	IT	16.48505	1.617068	5.476078	-3.45172	-6.98452	97.50333	0.261229	14.83667	16.44789
1977q4	IT	14.25432	1.451816	5.322473	-2.29098	-6.98452	97.28333	-0.60536	13.70333	15.33937
1978q1	IT	13.71917	1.508951	5.2689	-2.2225	-8.50526	95.73333	0.976115	13.24	14.75405
1978q2	IT	12.81179	2.53705	5.246514	-1.07846	-8.50526	96.47667	3.249505	13.03667	14.90736
1978q3	IT	12.13686	1.80917	5.28223	-0.59352	-8.50526	95.89	4.714089	12.99333	16.38902
1978q4	IT	11.88135	2.002012	5.453444	-0.39802	-8.50526	94.46333	5.37323	12.94	17.17424
1979q1	IT	11.64706	3.741518	5.566397	-0.28536	-8.26173	95.25	5.319768	12.73	17.12861
1979q2	IT	12.81999	2.440119	5.617437	-1.46613	-8.26173	97.31667	4.329258	12.73	16.93849
1979q3	IT	15.75537	0.700517	5.908144	-4.39924	-8.26173	98.57667	5.520032	13.03	18.14816
1979q4	IT	18.29805	-0.23242	5.539239	-5.29361	-8.26173	100.9167	6.334313	13.6	17.75476
1980q1	IT	20.93849	-1.18225	5.673204	-4.52906	-6.95872	104.1367	5.17678	14.26333	18.52364
1980q2	IT	20.38662	-2.47142	5.374575	-3.77885	-6.95872	103.1067	4.662599	15.04	19.16212
1980q3	IT	19.08076	-3.01927	5.69222	-2.31353	-6.95872	104.2333	2.787094	15.57667	23.13618
1980q4	IT	17.62121	-2.50629	5.556226	-0.22568	-6.95872	105.0067	1.114871	16.13	31.42663
1981q1	IT	15.78658	-3.92094	5.610913	1.626749	-10.8808	104.04	0.647424	16.58333	39.54631
1981q2	IT	16.99992	-2.38895	6.233658	2.561176	-10.8808	101.3067	0.631957	18.92333	46.99539
1981q3	IT	17.26333	-1.52734	6.347004	2.431137	-10.8808	101.16	0.83815	20.71333	36.41209
1981q4	IT	18.13166	-1.78836	6.881311	2.126106	-10.8808	100.54	0.992123	21.21	31.73418
1982q1	IT	17.24739	-2.39403	6.882819	3.228174	-10.0264	101.5	1.009946	20.58333	31.95014
1982q2	IT	15.5204	-1.00861	6.708003	4.952402	-10.0264	101.17	0.530559	20.64667	28.65042
1982q3	IT	15.60084	-2.09913	6.95158	4.162498	-10.0264	103.44	0.43076	20.04	24.98364
1982q4	IT	16.45328	-1.62832	7.130057	2.45615	-10.0264	105.8767	-0.6688	19.59	24.28633
1983q1	IT	15.27746	0.58486	7.381359	3.833108	-10.108	109.45	-0.34989	19.09	26.56656
1983q2	IT	15.27657	0.312494	7.771175	3.018427	-10.108	108.8267	-0.1858	18.29667	26.2494
1983q3	IT	13.49034	0.08168	7.602501	4.378559	-10.108	108.3367	1.712799	18.10667	26.14295
1983q4	IT	12.14285	-0.28807	8.019266	5.817148	-10.108	108.6633	4.196581	17.70333	23.84162
1984q1	IT	12.17938	0.066815	8.631135	5.580051	-11.4805	108.8333	3.7209	16.31	27.06087
1984q2	IT	10.71965	-0.94731	8.549431	6.383687	-11.4805	109.68	4.162827	15.67667	25.5669
1984q3	IT	9.971079	-1.1093	8.350615	6.932255	-11.4805	109.51	3.488321	15.36667	25.12559
1984q4	IT	8.336997	-1.05719	8.485586	8.970769	-11.4805	109.5133	1.311771	15.04333	24.31874
1985q1	IT	8.246115	-1.47098	8.469794	7.916086	-12.3779	110.0467	2.078182	13.35667	29.80956
1985q2	IT	8.808911	-1.22809	8.410313	6.661622	-12.3779	108.9233	3.068969	13.79	32.73006
1985q3	IT	9.016341	-0.8007	8.597512	5.683092	-12.3779	107.16	2.696204	13.99	39.45435
1985q4	IT	8.966613	-0.51692	8.962999	5.688921	-12.3779	109.0133	3.344747	13.71333	44.24818
1986q1	IT	8.472034	-0.0945	9.574587	7.974632	-11.9385	112.51	3.395886	13.55333	56.27399
1986q2	IT	7.549037	0.142251	9.871091	6.257097	-11.9385	113.4567	2.728383	11.33667	78.61548
1986q3	IT	6.82599	1.252718	9.763694	5.12901	-11.9385	116.2567	2.923734	10.76667	77.86607
1986q4	IT	6.146465	-0.02388	10.37016	5.219101	-11.9385	119.08	2.668896	10.21533	75.43163
1987q1	IT	5.573365	0.62024	9.903109	6.412202	-11.5219	119.4633	2.456445	9.883333	71.23441
1987q2	IT	5.645331	-0.90138	10.14738	5.150202	-11.5219	117.5067	3.314744	10.229	71.90996
1987q3	IT	5.817888	-0.13034	10.44277	5.712112	-11.5219	117.0033	2.609792	11.16667	63.44719
1987q4	IT	6.271496	-0.87547	10.49594	4.751838	-11.5219	118.3567	3.270292	11.29267	52.55711
1988q1	IT	6.948333	-0.86075	10.52854	3.723367	-11.0423	118.1167	4.322484	10.56767	46.2527
1988q2	IT	6.702746	-0.07265	10.47442	3.859487	-11.0423	116.14	3.452717	10.79833	46.94321
1988q3	IT	6.468675	-1.30582	10.39682	4.280225	-11.0423	114.78	4.469902	11.10733	48.97771
1988q4	IT	5.668115	-1.06283	10.404	5.619652	-11.0423	116.7633	4.586481	11.10967	53.48104
1989q1	IT	5.831965	-2.08364	10.32962	6.616501	-11.4158	117.79	3.744783	11.81	53.60553
1989q2	IT	5.620961	-1.09247	10.34681	7.038739	-11.4158	118.6233	3.542984	12.57633	55.11947
1989q3	IT	5.889313	-0.9049	10.32069	6.765287	-11.4158	120.7167	3.274611	13.02	61.453
1989q4	IT	6.68624	-0.94119	9.861865	6.031427	-11.4158	121.7333	3.111668	13.74267	57.67855
1990q1	IT	7.39116	-2.08573	9.433761	5.521574	-11.4401	124.3633	2.890208	13.99033	56.89867
1990q2	IT	8.009001	-1.18578	8.972621	4.020999	-11.4401	125.7633