Download or read book Models of Currency Crises with Self Fulfilling Features written by Maurice Obstfeld and published by . This book was released on 2000 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: The discomfort a government suffers from speculation against its currency determines the strategic incentives of speculators and the scope for multiple currency-market equilibria. After describing an illustrative model in which high unemployment may cause an exchange- rate crisis with self-fulfilling features, the paper reviews some other self-reinforcing mechanisms. Recent econometric evidence seems to support the practical importance of these mechanisms.
Download or read book A Generalised Model of Self fulfilling Currency Crises with a Possible Solution written by and published by . This book was released on 1996 with total page 64 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Perspectives on the Recent Currency Crisis Literature written by Robert P. Flood and published by International Monetary Fund. This book was released on 1998-09 with total page 58 pages. Available in PDF, EPUB and Kindle. Book excerpt: In the 1990s, currency crises in Europe, Mexico and Southeast Asia have drawn worldwide attention to speculative attacks on government-controlled exchange rates. To improve our understanding of these events, researchers have undertaken new theoretical and empirical work. In this paper, we provide some perspective on this work and relate it to earlier research in the area. Then we derive the optimal commitment to a fixed exchange rate and propose a common framework for analyzing currency crises that draws from both the early first-generation work and the more recent second-generation approach. The cross-generational framework stresses the important role of speculators and also recognizes that the government's commitment to a fixed exchange rate is constrained by other policy goals. In the final section we study the crisis prediction literature and find that some crises may be particularly difficult to predict using currently popular methods.
Download or read book Currency Crises written by Olivier Jeanne and published by Princeton University International Finance Section, Department of Econmics. This book was released on 2000 with total page 72 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Models of Currency Crises with Self fulfilling Features written by Maurice Obstfeld and published by . This book was released on 1995 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt: The discomfort a government suffers from speculation against its currency determines the strategic incentives of speculators and the scope for multiple currency-market equilibria. After describing an illustrative model in which high unemployment may cause an exchange- rate crisis with self-fulfilling features, the paper reviews some other self-reinforcing mechanisms. Recent econometric evidence seems to support the practical importance of these mechanisms.
Download or read book Banking Crises written by Garett Jones and published by Palgrave Macmillan. This book was released on 2014-01-14 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Why do banks collapse? Are financial systems more fragile in recent decades? Can policies to fix the banking system do more harm than good? What's the history of banking crises? With dozens of brief, non-technical articles by economists and other researchers, Banking Crises offers answers from diverse scholarly viewpoints.
Download or read book The Economics of Self fulfilling Currency Crises written by and published by . This book was released on 2010 with total page 360 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Financial Crises Explanations Types and Implications written by Mr.Stijn Claessens and published by International Monetary Fund. This book was released on 2013-01-30 with total page 66 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper reviews the literature on financial crises focusing on three specific aspects. First, what are the main factors explaining financial crises? Since many theories on the sources of financial crises highlight the importance of sharp fluctuations in asset and credit markets, the paper briefly reviews theoretical and empirical studies on developments in these markets around financial crises. Second, what are the major types of financial crises? The paper focuses on the main theoretical and empirical explanations of four types of financial crises—currency crises, sudden stops, debt crises, and banking crises—and presents a survey of the literature that attempts to identify these episodes. Third, what are the real and financial sector implications of crises? The paper briefly reviews the short- and medium-run implications of crises for the real economy and financial sector. It concludes with a summary of the main lessons from the literature and future research directions.
Download or read book A Model of Crises in Emerging Markets written by Michael P. Dooley and published by . This book was released on 1997 with total page 50 pages. Available in PDF, EPUB and Kindle. Book excerpt: First generation models of speculative attacks show that apparently random speculative attacks on policy regimes can be fully consistent with rational and well-informed speculative behavior. Unfortunately, models driven by a conflict between exchange rate policy and other macroeconomic objectives do not seem consistent with important empirical regularities surrounding recent crises in emerging markets. This has generated considerable interest in models that associate crises with self-fulfilling shifts in private expectations." In this paper we develop a first generation model based on an alternative policy conflict. Credit constrained governments accumulate reserve assets in order to self-insure against shocks to national consumption. Governments also insure poorly regulated domestic financial markets. Given this policy regime, a variety of internal and external shocks generate capital inflows to emerging markets followed by successful and anticipated speculative attacks. We argue that a common external shock generated capital inflows to emerging markets in Asia and Latin America after 1989. Country specific factors determined the timing of speculative attacks. Lending policies of industrial country governments and international organizations account for contagion, that is, a bunching of attacks over time
Download or read book Currency Crises written by Paul Krugman and published by University of Chicago Press. This book was released on 2007-12-01 with total page 367 pages. Available in PDF, EPUB and Kindle. Book excerpt: There is no universally accepted definition of a currency crisis, but most would agree that they all involve one key element: investors fleeing a currency en masse out of fear that it might be devalued, in turn fueling the very devaluation they anticipated. Although such crises—the Latin American debt crisis of the 1980s, the speculations on European currencies in the early 1990s, and the ensuing Mexican, South American, and Asian crises—have played a central role in world affairs and continue to occur at an alarming rate, many questions about their causes and effects remain to be answered. In this wide-ranging volume, some of the best minds in economics focus on the historical and theoretical aspects of currency crises to investigate three fundamental issues: What drives currency crises? How should government behavior be modeled? And what are the actual consequences to the real economy? Reflecting the latest thinking on the subject, this offering from the NBER will serve as a useful basis for further debate on the theory and practice of speculative attacks, as well as a valuable resource as new crises loom.
Download or read book Currency Speculation in Fixed Exchange Rate Regimes written by Anja Zenker and published by Springer Science & Business Media. This book was released on 2014-01-08 with total page 142 pages. Available in PDF, EPUB and Kindle. Book excerpt: Speculative currency crises seem to have become a common and inevitable phenomenon in the international monetary system. Against this background, various approaches have been developed by economists to cover the broad range of situations in which balance-of-payments crises occurred. Anja Zenker provides a comprehensive insight into the body of theoretical and empirical literature about currency speculation in fixed exchange rate regimes. The author discusses different generations of theoretical models and their empirical relevance in recent currency crises. Moreover, she considers diverse policy options which attempt to avoid speculative attacks on exchange rate pegs.
Download or read book Policy Implications of Second Generation Crisis Models written by Ms. Nancy P. Marion and published by International Monetary Fund. This book was released on 1997-02-01 with total page 12 pages. Available in PDF, EPUB and Kindle. Book excerpt: After the speculative attacks on government-controlled exchange rates in Europe and in Mexico, economists began to develop models of currency crises with multiple solutions. In these models, a currency crisis occurs when the economy suddenly jumps from one solution to another. This paper examines one of the new models, finding that raising the cost of devaluation may make a crisis more likely. Consequently, slow convergence to a monetary union, which increases the cost to the government of reneging on an exchange rate peg, may be counterproductive. This conclusion is exactly the opposite of that obtained from earlier models.
Download or read book Expectations and Contagion in Self Fulfilling Currency Attacks written by Todd Keister and published by . This book was released on 2010 with total page 25 pages. Available in PDF, EPUB and Kindle. Book excerpt: Self-fulfilling expectations are commonly believed to play an important role in the transmission of currency crises across countries. However, existing models that use multiple equilibria to illustrate the importance of such expectations have many undesirable features. This paper presents a new mechanism, based on the global-games framework, through which self-fulfilling expectations can generate contagion. If speculators expect contagion across markets to occur, they have an incentive to trade in both currencies to take advantage of this correlation. These actions, in turn, link the two markets in such a way that a sharp devaluation of one currency will be propagated to the other market and will fulfill the original expectations. Even though the resulting model has multiple equilibria, it places restrictions on observable variables that are broadly consistent with existing empirical evidence.
Download or read book Three Branches of Theories of Financial Crises written by Itay Goldstein and published by . This book was released on 2015-12-15 with total page 80 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this monograph, we review three branches of theoretical literature on financial crises. The first deals with banking crises originating from coordination failures among bank creditors. The second deals with frictions in credit and interbank markets due to problems of moral hazard and adverse selection. The third deals with currency crises. We discuss the evolutions of these branches in the literature, and how they have been integrated recently to explain the turmoil in the world economy during the East Asian crises and in the last few years. We discuss the relation of the models to the empirical evidence and their ability to guide policies to avoid or mitigate future crises.
Download or read book Are Currency Crises Self fulfilling written by and published by . This book was released on 1996 with total page 163 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Causes and Solutions for Currency Crises Historical Overview and Explanatory Models written by James Oppong-Gyebi and published by . This book was released on 2023-04-05 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Seminar paper from the year 2021 in the subject Economics - Monetary theory and policy, grade: 2.3, University of Siegen (Faculty 3: School of Economic Discipline), language: English, abstract: In recent years, several currency crises were recorded. These include the currency crises of Latin America (1995), East Asia (1997), Russia (1998), Zimbabwe (2000), Turkey (2018), and currently Lebanon and Venezuela. Why have some currencies failed or crashed throughout history? And are there models/theories to explain why these crises occur? This paper, therefore, seeks to primarily discuss the general and some possible reasons behind the occurrence of currency crises. The paper also looks at the possible outcomes and effects of currency crises as well as measures that can be taken to address them. It discusses further some known examples of currency crises and the features they have in common. The rest of the paper is structured as follows: Section 2: Definition of currency crises; Section 3: The general theories of currency crises; Section 4: Examples of some historic currency crises; Section 5: Possible or potential causes of currency crises; Section 6: The outcomes and costs of currency crises; Section 7: Early warning systems and indicators of a currency crisis; Section 8: Measures to mitigate or prevent a currency crisis; and Section 9: Conclusion.
Download or read book Currency Crises Sunspots and Markov switching Regimes written by Olivier Jeanne and published by . This book was released on 1998 with total page 48 pages. Available in PDF, EPUB and Kindle. Book excerpt:
