1. Please see Chapter 3.
2. This is not a new phenomena. Already in 1898 sovereigns had “... creative accounting: as one Portuguese official confessed to the Crédit lyonnais, the annual abstract of Portuguese finances was ‘filled with intended errors’.”(Flandreau (1998), p.19).
3. Kaminsky, Reinhardt and Lizondo (1998) established a data set of risk indicators on monthly basis that I would like to use once the authors allow to use the data for other than their purposes. Unfortunately, this data set is not publicly available. (See also Chapter 1 and 6 for more details.)
4. This results from F and Hausmann tests which tested for alternative model specification simple OLS, the VAR model (variation of slopes and intercepts across the country units), and the Between model.
5. Monthly or quarterly data for variables such as government spending are not available for all countries.