When analyzing the appropriate response for monetary policy during a currency crisis, it is important to keep in mind two distinct channels: the effect of raising interest rates on exchange rates and the direct effect of exchange rate changes on output. The first pertains to the monetary side of...

When analyzing the appropriate response for monetary policy during a currency crisis it is important to keep in mind two distinct channels: (a) the impact of raising interest rates on exchange rates; and (b) the direct impact of exchange rate changes on output. The first pertains to the monetary...

The huge increase in international reserve holdings by Asian countries since the 1997 crisis has been one of the most important recent developments on the international financial scene. These buildups have contributed substantially to concerns about the creation of excessive global liquidity....

The literature on the East Asian crisis has concentrated almost exclusively on the five crisis-hit economies of Indonesia, Korea, Malaysia, Thailand and the Philippines (Asia-5). Relatively scant attention has been paid to the "twin cities" of Hong Kong and Singapore, both of which also suffered...

This paper tackles the issue of investment and optimal 'choice' of market structure for a foreign multinational enterprise (MNE) in a newly liberalized economy under uncertainty and in the presence of sunk costs. A minimalist duopolistic model is developed whereby a foreign investor's subjective...

A common feature of numerous studies on early warning systems (EWS) of currency crisis is the use of an index of exchange market pressure, defined as a weighted average of the rate of depreciation, the monthly percentage changes in international reserves, and sometimes the inclusion of the...

Recent financial crises seem to have led to the broad consensus that developing countries should steer clear of exchange rate regimes that lie anywhere between the two extremes or [corner solutions] of credibly fixed or flexible arrangements. But is this a reasonable position to adopt? Would...

The East Asian financial crisis has spawned a number of proposals for institutional reform. Some envisage reforming existing institutions, particularly the International Monetary Fund (IMF), while others suggest that new institutions are needed. Amongst them is the idea of establishing an Asian...