The Fall of Bretton Woods: Which Geography Matters?

This paper analyses the spatial diffusion of the speculative attacks during the fall of the Bretton Woods System. First, we study the spatial heterogeneity of the relationship between speculative pressures and their determinants via a locally linear framework. Here, relationships were assumed to reflect mainly geographical space. However, mapping the countries in crisis also showed that the spatial diffusion of attacks was not linear. Therefore, we used a neuro-coefficient smooth transition auto-regressive model to investigate more complex interactions between geographical space and crises. Our results suggest that combining geographical and socio-economic spaces is useful for predicting the location of future victims.