Both empirical and theoretical studies suggest that currency attacks can occur even in a fixed exchange rate regime with sound fundamentals. Can mechanisms be designed to prevent such currency attacks? To address this question, we first need a theory of currency crisis. I argue that such a...

This paper extends the work by Morris and Shin (1998) where multiple equilibria in the self-fulfilling currency attack models can be reduced to a unique equilibrium when agents observe fundamentals privately with small errors. We find that under a more general specification with realistic...

This paper extends the work by Morris and Shin (1998) where multiple equilibria in the self-fulfilling currency attack models can be reduced to a unique equilibrium when agents observe fundamentals privately with small errors. We find that under a more general specification with realistic...