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Living with the Trilemma Constraint : Relative Trilemma Policy Divergence, Crises, and Output Losses for Developing Countries

Aizenman, Joshua - 2013

This paper investigates the potential impacts of the degree of divergence in open macroeconomic policies in the context of the trilemma hypothesis. Using an index that measures the relative policy divergence among the three trilemma policy choices, namely monetary independence, exchange rate...

Persistent link: https://www.econbiz.de/10013075864

Lessons from the Asian Crisis

Mishkin, Frederic S. - 2021

This paper provides an asymmetric information analysis of the recent East Asian crisis. It then outlines several lessons from this crisis. First, there is a strong rationale for an international lender of last resort. Second, without appropriate conditionality for this lending, the moral hazard...

Persistent link: https://www.econbiz.de/10013225947

From Sudden Stops to Fisherian Deflation : Quantitative Theory and Policy Implications

Korinek, Anton - 2013

The 1990s Sudden Stops in emerging markets were a harbinger for the 2008 global financial crisis. During Sudden Stops, countries lost access to credit, causing abrupt current account reversals, and suffered Great Recessions. This paper reviews a class of models that yields quantitative...

Persistent link: https://www.econbiz.de/10013077215

The Forward Exchange Market, Speculation, and Exchange Market Intervention

Eaton, Jonathan; Turnovsky, Stephen J. - 2021

This paper develops a stochastic equilibrium model of an open economy incorporating speculation in the forward exchange … market. The model is used to examine two issues. The first is the role of speculation in stabilizing the economy against … stochastic disturbances. Much risk averse speculation stabilizes domestic income against disturbances in the domestic bond market …

Persistent link: https://www.econbiz.de/10013247678

Reverse Speculative Attacks

Amador, Manuel - 2016

In January 2015, in the face of sustained capital inflows, the Swiss National Bank abandoned the floor for the Swiss Franc against the Euro, a decision which led to the appreciation of the Swiss Franc. The objective of this paper is to present a simple framework that helps to better understand...

Persistent link: https://www.econbiz.de/10012989737

Why Clashes between Internal and External Stability Goals End in Currency Crises, 1797-1994

Bordo, Michael D.; Schwartz, Anna J. - 2021

We argue that recent currency crises reflect clashes between fundamentals and pegged exchange rates, just as did crises in the past. We reject the view that crises reflect self-fulfilling prophecies that are not closely related to measured fundamentals. Doubts about the timing of a market attack...

Persistent link: https://www.econbiz.de/10013216858

Perspectives on the Recent Currency Crisis Literature

Flood, Robert P.; Marion, Nancy Peregrim - 2021

In the 1990s, currency crises in Europe, Mexico and Southeast Asia have drawn worldwide attention to speculative …

Persistent link: https://www.econbiz.de/10013224322

Contagious Currency Crises

Eichengreen, Barry; Rose, Andrew Kenan; Wyplosz, Charles - 2010

This paper is concerned with the fact that the incidence of speculative attacks tends to be temporally correlated; that is, currency crises appear to pass contagiously from one country to another. The paper provides a survey of the theoretical literature, and analyzes the contagious nature of...

Persistent link: https://www.econbiz.de/10014076135

Models of Currency Crises with Self-Fulfilling Features

Obstfeld, Maurice - 2000

The discomfort a government suffers from speculation against its currency determines the strategic incentives of …

Persistent link: https://www.econbiz.de/10014158713

Political Contagion in Currency Crises

Drazen, Allan - 2021

Existing models of contagious currency crises are summarized and surveyed, and it is argued that more weight should be put on political factors. Towards this end, the concept of political contagion introduced, whereby contagion in speculative attacks across currencies arises solely because of...

Persistent link: https://www.econbiz.de/10013239960

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