The paper deals with stabilization as a one-shot problem to ask what quot;credibilityquot; means in a world where programs will succeed with probability one. A model is spelled out where the equilibrium program has some ex ante probability of failure. The model draws attention to the factors...

Over the past 20 years there has been a proliferation of emerging market crises and a vast accumulation of commentary -- descriptive, theoretical and applied -- highlighting the origins and mechanics of each crisis and of crises in general. And there is plenty of analysis on how to deal with...