The economic recession has contributed a lot to the shipping market crisis in Korea. When a financial crisis breaks out, crisis indices become useful primarily in shipping markets. Thus, proposing crisis indices predicting the market crisis more accurately means. The purpose of this study is to find crisis indices in shipping markets in Korea using the signals approach proposed by Kaminsky, Lizondo and Reinhart (1998). The signals approach was not originally designed to predict the crisis of shipping markets. However, as the approach is an efficient method to find out indices of an economic crisis, it is assumed to be also useful in predicting risks of shipping markets in Korea. The history of Korea shipping markets is comparatively short compared to those of advanced countries, and the former has its own characteristics. We conduct the analysis of crisis indices of those markets using our revised signals approach. These two approaches are compared. Finally, this study shows that our revised signals approach improved the predictability of the shipping market crisis in Korea.
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