This paper studies whether the dynamic behaviour of GNP growth, unemployment and inflation is systematically affected by the timing of elections and of changes of governments. The sample includes the last three decades in 18 OECD economies. We explicitly test the implication of several models of...

This unique collection of seminal articles reflects on the evolution of international finance in the 1990s, exploring the recurrence of financial crises and the resultant policy responses. The editors have brought together groundbreaking academic research addressing the policy decisions made by...

We develop an early-warning model of sovereign debt crises. A country is defined to be in a debt crisis if it is classified as being in default by Standard & Poor's, or if it has access to nonconcessional IMF financing in excess of 100 percent of quota. By means of logit and binary recursive...

We present a two-country extension of Lucas' (1988) work on how cash-in-advance constraints in asset markets affect the pricing of financial assets. In the model, there is some degree of separation between the goods markets and the assets markets, and money is used for transactions in both...

Currency crises are usually associated with large nominal and real depreciations. In some countries depreciations are perceived to be very costly (‘fear of floating’). In this paper we try to understand the reasons behind this fear. We first look at episodes of currency crises in the 1990s...