The dramatic events in Asia and Russia, and the contagion they have spread, have generated a torrent of commentary about exchange rates, hot money, and exchange controls. As someone who was deeply involved in Indonesia and who predicted that the ruble would collapse by midyear, I offer my views...

In a model where all banks are initially solvent, an exogenous shock affects confidence, causing a flight from deposits into domestic and foreign currency. Real interest rates increase unexpectedly affecting firms and raising the share of the banks' nonperforming assets. This increase causes...

In a model where all banks are initially solvent, an exogenous shock affects confidence, causing a flight from deposits into domestic and foreign currency. Real interest rates increase unexpectedly, affecting firms and raising the share of the banks` nonperforming assets. This increase causes...