In this paper I present a currency crisis model where self- fulfilling devaluation expectations exist if one allows for a corporate bankruptcy. I show that: 1) A self-fulfilling devaluation crisis occurs when the financial intermediary's ability to collect the debt back from a bankrupt firm is...

In this paper I propose a "double standard" fixed exchange rate system which will be shown to have a higher expected lifetime than a conventional fixed exchange rate system. I present a simple variant of the classic Flood-Garber-Krugman model where the domestic currency is pegged to one of the...

I present a simple general equilibrium currency crisis model where the interplay between the bank deposit and lending market limits the central bank's ability to use the interest rate defence for preventing currency crises. I show that the interest rate defence will succeed in an economy where...