To mark the retirement of Robert S. McNamara as President of the World Bank after thirteen years of service, the Bank's Executive Directors commissioned a book gathering together all the principal statements Mr. McNamara made during his tenure of office

"The author presents evidence that balance sheet effects are critical determinants of both the likelihood of a crisis and of income losses following a crisis. She tests the validity of "insurance" and "liquidity" models of currency crisis. Both models predict that the occurrence of a balance of...