Models of Currency Crises with Self-Fulfilling Features

Maurice Obstfeld

No 5285, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The discomfort a government suffers from speculation against its currency determines the strategic incentives of speculators and the scope for multiple currency-market equilibria. After describing an illustrative model in which high unemployment may cause an exchange- rate crisis with self-fulfilling features, the paper reviews some other self-reinforcing mechanisms. Recent econometric evidence seems to support the practical importance of these mechanisms.

JEL-codes: E58 F33 (search for similar items in EconPapers)
Date: 1995-10
Note: IFM ITI
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Citations: View citations in EconPapers (57)

Published as European Economic Review, vol. 40, pp. 1037-1047, 1996.

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Journal Article: Models of currency crises with self-fulfilling features (1996)
Working Paper: Models of Currency Crises with Self-fulfilling Features (1996)
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