How does uncertainty about fundamentals affect speculation in the foreign exchange markets? This paper studies empirically the role of uncertainty in currency crises. Uncertainty, which is measured using the dispersion of survey forecasts of key macroeconomic variables, is found to have a...

This paper studies empirically how uncertainty affects speculation in the foreign exchange markets. We use the dispersion of survey forecasts of key macroeconomic variables to measure uncertainty about fundamentals. We find that uncertainty has a non-monotone effect on exchange rate pressures:...

This paper extends some theoretical results of Morris and Shin (1998) concerning the role of uncertainty about fundamentals in currency crises and tests their empirical relevance using a novel approach based on the distribution of survey expectations. Econometric evidence from the Asian crisis...

This paper studies how uncertainty about fundamentals contributed to currency crises from both a theoretical and an empirical perspective. We find evidence - based on a monthly dataset of Consensus forecasts for six Asian countries in the period January 1995-May 2001 - confirming the theoretical...