This paper proposes a new method of measuring the degree of currency misalignment through the use of offshore forward exchange rates. Using default risk adjusted no­arbitrage conditions for forward exchange contracts, we calculate the spot exchange rates and the domestic interest rates that are...

This paper documents the unfolding process of the Korean crisis in 1997. First, we show that it was hard to predict the Korean crisis at least up till the first half of 1997. Our judgement is based on the pre-crisis behavior of the leading indicators of currency crisis, the financial market data...