Models of currency crises with self-fulfilling features: A comment.

Much attention has been paid to models of currency crisis with self-fulfilling features and the concept of multiple equilibria developed in the 1990s. They aim at explaining currency crisis without apparent fundamental disequilibrium. They are also useful to render account for currency crisis unpredictability. This paper re-examines an illustrative model of Obstfeld (1996), in which high unemployment may cause an exchange-rate crisis with selffulfilling features. By completing the algebraic demonstration, this paper shows that there are less equilibria than conjectured.