REBELO, SERGIO; VÉGH, CARLOS A. - In: Review of Economic Studies 75 (2008) 3, pp. 929-955
The influential Krugman-Flood-Garber (KFG) model of balance of payment crises assumes that a fixed exchange rate is abandoned if and only if international reserves reach a critical threshold value. From a positive standpoint, the KFG rule is at odds with many episodes in which the central bank...
