We model the joint process for real per capita U.S. federal government spending and tax revenues as a Threshold Vector Error Correction. We find evidence that fiscal authorities will intervene to reduce real per capita deficit only when it reaches a certain threshold. We also find that fiscal...

This paper provides an empirical framework to analyse the nature of currency crises by extending earlier work of Jeanne and Masson (2000; Journal of International Economics, Vol. 50, pp. 327–350). Jeanne and Masson suggest a Markov regime switching models to analyse models of currency crises with...

This paper provides the empirical framework to analyse the nature of currency crises by extending earlier work of Jeanne and Masson (2000) who suggest that a currency crisis model with multiple equilibria can be estimated using Markov regime switching (MRS) models. However, Jeanne and Masson...