A Model to Explain the Duration of a Currency Crisis.
There are two main schools of thought which seek to explain currency crises: fundamentalist theories (Krugman P. 1979) and speculative theories (Obstfeld M. 1986). However, neither of these approaches considers the duration of a currency crisis. I explain the duration of a crisis in terms of a war of attrition model. Having set up the basic framework, I consider the impact of a change in the parameter values on a government's optimal time of concession. I them introduce asymmetric post-stabilization utilities into the framework. Copyright @ 2000 by John Wiley & Sons, Ltd. All rights reserved.
Year of publication: |
2000
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Authors: | Allsopp, Louise |
Published in: |
International Journal of Finance & Economics. - John Wiley & Sons, Ltd.. - Vol. 5.2000, 4, p. 331-37
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Publisher: |
John Wiley & Sons, Ltd. |
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