Debt Crises and Exchange Crises

P. Reding

Working Papers from Notre-Dame de la Paix, Sciences Economiques et Sociales

Abstract: The paper examines to what extent a high public debt implies high vulnerability of a fixed exchange regime to currency crises. We combine a model of optimal debt repudiation, through inflation-devaluation, with a stochastic balance of payments crisis model.

Keywords: PUBLIC DEBT; EXCHANGE RATE; CURRENCIES; BALANCE OF PAYMENTS; INFLATION (search for similar items in EconPapers)
JEL-codes: E50 E52 H60 H63 (search for similar items in EconPapers)
Pages: 30 pages
Date: 1996
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Persistent link: https://EconPapers.repec.org/RePEc:fth:nodapa:171

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