Fiscal Deficits and Currency Crises

This paper investigates currency and financial crises in an optimizing general equilibrium model. It is shown that a rise in current and expected future budget deficits generates a real exchange rate appreciation and a decumulation of external assets, leading up to a currency crisis when foreign reserves approximate a critical level. Strong empirical support for our model is obtained by a probit estimation for Latin American and Asian countries

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Year of publication:	2014
Authors:	Marini, Giancarlo ; Piersanti, Giovanni
Publisher:	[S.l.] : SSRN
Subject:	Haushaltsdefizit \| Budget deficit \| Währungskrise \| Currency crisis \| Öffentliche Schulden \| Public debt \| Theorie \| Theory \| Welt \| World

Extent:	1 Online-Ressource (37 p)
Type of publication:	Book / Working Paper
Language:	English
Notes:	Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments May 2003 erstellt
Other identifiers:	10.2139/ssrn.403201 [DOI]
Classification:	F31 - Foreign Exchange ; F32 - Current Account Adjustment; Short-Term Capital Movements ; F41 - Open Economy Macroeconomics ; E52 - Monetary Policy (Targets, Instruments, and Effects) ; E62 - Fiscal Policy; Public Expenditures, Investment, and Finance; Taxation
Source:	ECONIS - Online Catalogue of the ZBW

Persistent link: https://www.econbiz.de/10014085505