Models of Currency Crises with Self-Fulfilling Features

The discomfort a government suffers from speculation against its currency determines the strategic incentives of speculators and the scope for multiple currency-market equilibria. After describing an illustrative model in which high unemployment may cause an exchange- rate crisis with self-fulfilling features, the paper reviews some other self-reinforcing mechanisms. Recent econometric evidence seems to support the practical importance of these mechanisms.

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Year of publication:	1995-10
Authors:	Obstfeld, Maurice
Institutions:	National Bureau of Economic Research (NBER)

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Extent:	application/pdf
Series:	NBER Working Papers.
Type of publication:	Book / Working Paper
Notes:	IFM ITI published as European Economic Review, vol. 40, pp. 1037-1047, 1996. Number 5285
Classification:	F33 - International Monetary Arrangements and Institutions ; E58 - Central Banks and Their Policies
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005829258