There are significant effects of changing demographics on economic indicators: growth in GDP especially, but also the current account balance and gross capital formation. The 15-24 age group appears to be one of the key age groups in these effects, with increases in that age group exerting...

Evolution of speculative attack models show certain progress in developing idea of the role of expectations in the crisis mechanism. Obstfeld (1996) defined expectations as fully exogenous. Morris and Shin (1998) endogenised the expectations with respect to noise leaving information significance...

We examine the consequences of a sudden increase in household debt burdens by exploiting variation in exposure to household foreign currency debt during Hungary's late-2008 currency crisis. The revaluation of debt burdens leads to higher default rates and a collapse in spending. These responses...

This paper studies the design of optimal monetary policy rules for emerging economies confronted to sharp capital outflows and speculative attacks. We extend Taylor type monetary policy rules by allowing the central bank to give some weight to the level of precautionary foreign reserve balances...

Global games of regime change – coordination games of incomplete information in which a status quo is abandoned once a sufficiently large fraction of agents attacks it – have been used to study crises phenomena such as currency attacks, bank runs, debt crises, and political change. We extend...

We apply an infinite horizon intertemporal optimization model to a simple speculative attack framework. Thereby, the central bank faces a one control two-state variables optimization problem with endogenuous exit. By setting the interest rate the central bank can stimulate the economy or fend...

Our friend and colleague Rüdiger Dornbusch passed away before he was able tocomplete his book based on the Munich Lectures in Economics that he gave inNovember 17, 1998, at the Center for Economic Studies of Ludwig-Maximilians-Universität.The lectures contain a fascinating overview of the...

In 1998 Rüdiger Dornbusch gave the Munich Lectures in Economics entitled International Financial Crises . The CES Academic Council awarded him the prize and title Distinguished CES Fellow for his outstanding work on the monetary theory of foreign trade.Rüdiger Dornbusch passed away on July 25,...

This paper investigates contagion effects. In a model with highly and lowly informed investors we show that a currency crisis in one country can trigger a crisis in another country. Portfolio losses of the highly informed investors in one country will force them to withdraw capital from the...

This paper investigates contagion effects. In a model with highly and lowly informed investors we show that a currency crisis in one country can trigger a crisis in another country. Portfolio losses of the highly informed investors in one country will force them to withdraw capital from the...