This paper examines a global games model of speculative attacks in which speculators can choose to attack any one of a number of targets. In the canonical global games model of speculative attacks with a single target, it is well known that there exists a unique equilibrium that survives...

When faced with a speculative attack, banks and governments often hesitate, attempting to withstand the attack but giving up after some time, suggesting they have some ex-ante uncertainty about the attack they will face. I model that uncertainty as arising from incomplete information about...

High interest rates to defend the exchange rate signal that a government is committed to fixed exchange rates, but may also signal weak fundamentals. We test the effectiveness of the interest rate defense by disaggregating into the effects on future interest rates differentials, expectations of...

This paper evaluates the treatment effect of consistent pegs (i.e., a policy in which countries actually adopt announced pegged regimes) on the occurrence of currency crises to examine whether consistent pegs are indeed more prone to currency crises than other regimes. Using matching estimators...

Speculative attacks on fixed or ‘fixed but adjustable’ exchange rate regimes seem to have become a standard feature of the landscape of foreign exchange markets. The supposed excesses of seemingly untethered financial markets have been documented for some time, but only recently...

This paper provides evidence on the effects of capital controls. We show that controls have been associated with significant differences in macroeconomic behaviour, especially in monetary policy. While they have not prevented speculative attacks, they have provided the breathing space needed to...