Government Finance in the Wake of Currency Crises

Craig Burnside (), Martin Eichenbaum () and Sergio Rebelo ()

No 501, RCER Working Papers from University of Rochester - Center for Economic Research (RCER)

Abstract: This paper addresses two questions: (i) how do governments actually pay for the fiscal costs associated with currency crises; and (ii) what are the implications of different fi­nancing methods for post-crisis rates of inflation and depreciation? We study these questions using a general equilibrium model in which a currency crisis is triggered by prospective government defi­cits. We then use our model in conjunction with fiscal data to interpret government fi­nancing in the wake of three recent currency crises: Korea (1997), Mexico (1994) and Turkey (2001).

Keywords: Currency crisis; bnking crisis; speculative attacks; seigniorage; fiscal reform; bailouts.icity of intertemporal substitution. (search for similar items in EconPapers)
JEL-codes: F31 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dge and nep-fin
Date: 2003-05
View list of references View citations in EconPapers

Downloads: (external link)
http://rcer.econ.rochester.edu/RCERPAPERS/rcer_501.pdf full text (application/pdf)
None

Related works:
Working Paper: Government Finance in the Wake of Currency Crises (2003)
Working Paper: Government Finance in the Wake of Currency Crises (2003)
Working Paper: Government Finance in the Wake of Currency Crises (2005)
Journal Article: Government finance in the wake of currency crises (2006)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:roc:rocher:501

Access Statistics for this paper

More papers in RCER Working Papers from University of Rochester - Center for Economic Research (RCER)
Address: UNIVERSITY OF ROCHESTER, CENTER FOR ECONOMIC RESEARCH, DEPARTMENT OF ECONOMICS, HARKNESS 231 ROCHESTER NEW YORK 14627 U.S.A.
Series data maintained by Terry Fisher ().