Currency Crises in Developed and Emerging Market Economies : A Comparative Empirical Treatment

Author/Editor:

Thomson Fontaine

Publication Date:

January 1, 2005

Electronic Access:

Free Full Text. Use the free Adobe Acrobat Reader to view this PDF file

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

This paper takes a step in empirically testing the implications of a number of theoretical models that attempt to highlight the dynamics behind currency crises. By focusing on countries with broadly disparate economic and political arrangements, the study attempts to determine the extent to which these variables matter in affecting the probabilities of currency crises occurring. The empirical findings provide support for the view that, in general, a deterioration in economic fundamentals and the pursuit of lax monetary policy can contribute to currency crises. The experiences of several emerging market economies suggests that the sustainability of exchange rate policy depends both on adequate policy responses to the shocks to the economy and on the fragility of the economic, financial, and political system.

Series:

Working Paper No. 05/13

Subject:

English

Publication Date:

January 1, 2005

ISBN/ISSN:

9781451860320/1018-5941

Stock No:

WPIEA2005013

Price:

$15.00 (Academic Rate:$15.00)

Format:

Paper

Pages:

35

Please address any questions about this title to publications@imf.org