Perspectiveson the Recent Currency Crisis Literature

IMF Working Papers, September 1, 1998

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Perspectiveson the Recent Currency Crisis Literature

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Bibliographic details

• Authors: Nancy P. Marion, Robert P Flood
• Published: September 1, 1998
• Series: IMF Working Papers
• DOI: https://doi.org/10.5089/9781451855166.001

Overview

• Authors: Nancy P. Marion, Robert P Flood
• Publication date: September 1, 1998
• Type: IMF Working Papers
• Summary (verbatim from source): "In the 1990s, currency crises in Europe, Mexico, and Asia have drawn worldwide attention to speculative attacks on government-controlled exchange rates and have prompted researchers to undertake new theoretical and empirical analysis of these events. This paper provides some perspective on this work and relates it to earlier research. It derives the optimal commitment to a fixed exchange rate and proposes a common framework for analyzing currency crises. This framework stresses the important role of speculators and recognizes that the government’s commitment to a fixed exchange rate is constrained by other policy goals. The final section finds that some crises may be particularly difficult to predict using currently popular methods."

Analytical framework and key findings

• Paper derives the optimal commitment to a fixed exchange rate.
• Proposes a common framework for analyzing currency crises that:
  • Stresses the important role of speculators.
  • Recognizes that the government’s commitment to a fixed exchange rate is constrained by other policy goals.
• Final section finding: "some crises may be particularly difficult to predict using currently popular methods."

Subjects and keywords (as listed)

• Subject: Conventional peg, Currencies, Currency crises, Domestic credit, Exchange rates, Financial crises, Foreign exchange, Money
• Keywords: capital gain, Conventional peg, crisis literature, Currencies, Currency crises, currency crisis, currency depreciation, depreciation rate, Domestic credit, Europe, Exchange rates, exchange-rate authority, exchange-rate jump, exchange-rate parity, interest rate, money demand, price level, rate change, rate of exchange, shadow exchange rate, shadow exchange rate period, shadow rate, Speculative attack, WP

Content in this bundle

• Perspectives on the Recent Currency Crisis Literature - WP/98/130
  • Perspectives on the Recent Currency Crisis Literature - WP/98/130 (Markdown version)
  • Perspectives on the Recent Currency Crisis Literature - WP/98/130 (PDF)