AGHION, Philippe; BACCHETTA, Philippe; BANERJEE, Abhijit - Départment d'économétrie et d'économie politique … - 1999
This paper analyzes the optimal interest rate policy in currency crises. Firms are credit constrained and have debt in domestic and foreign currency, a situation that may easily lead to a currency crisis. An interest rate increase has an ambiguous effect on firms since it both makes more...