Despite major recent advance in the literature on financial crises, the key role of central banks in the dynamics of financial crises are still not well understood. Our aim is to contribute to a better understanding of the dynamics of financial crises by explicitly modeling the strategic options...

Empirically, currency crises are more frequently accompanied by simultaneous sovereign debt crises than by banking crises. Nevertheless the phenomenon of twin currency and debt crises has so far been treated in economic literature only sparsely. We analyse the optimal policy of a government that...

Empirically, currency crises are more frequently accompanied by sovereign debt crises than by banking crises. Nevertheless the phenomenon of twin currency and debt crises has so far been neglected in economic literature. We analyze the optimal policy of a government that may choose and combine...