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:	1996-01
Authors:	Obstfeld, Maurice
Institutions:	C.E.P.R. Discussion Papers
Subject:	Balance-of-payments Crisis \| Fixed Exchange Rate \| Multiple Equilibria \| Speculative Attack

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Extent:	application/pdf
Series:	CEPR Discussion Papers.
Type of publication:	Book / Working Paper
Notes:	Number 1315
Classification:	E58 - Central Banks and Their Policies ; F33 - International Monetary Arrangements and Institutions
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005136646