Policy Making and Speculative Attacks in Models of Exchange Rate Crises: A Synthesis

Giancarlo Corsetti and Lilia Cavallari

Working Papers from Yale - Economic Growth Center

Abstract: This paper discusses within a common analytical framework the logical and analytical links between theories of exchange rate crises that model the abandonment of a peg as an optimizing decision by rational policy makers, and theories that focus on the dynamics of speculative attacks when policies are incoherent with the indefinite defense of the current nominal parity.

Keywords: EXCHANGE RATE; MODELS; FINANCIAL MARKET; INTERNATIONAL FINANCE (search for similar items in EconPapers)
JEL-codes: E40 E42 F30 F31 G15 (search for similar items in EconPapers)
Pages: 26 pages
Date: 1996
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Citations: View citations in EconPapers (10)

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Persistent link: https://EconPapers.repec.org/RePEc:fth:yalegr:752

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