EconPapers    
Economics at your fingertips  
 

Why Clashes Between Internal and External Stability Goals End in Currency Crises, 1797-1994

Michael Bordo () and Anna Schwartz

No 5710, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We argue that recent currency crises reflect clashes between fundamentals and pegged exchange rates, just as did crises in the past. We reject the view that crises reflect self-fulfilling prophecies that are not closely related to measured fundamentals. Doubts about the timing of a market attack on a currency are less important than the fact that it is bound to happen if a government's policies are inconsistent with pegged exchange rates. We base these conclusions on a review of currency crises in the historical record under metallic monetary regimes and of crises post-World War II under Bretton Woods, and since, in European and Latin American pegged exchange rate regimes.

JEL-codes: F (search for similar items in EconPapers)
Date: 1996-08
Note: ME IFM
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16) Track citations by RSS feed

Published as Open Economies Review, Vol. 7 pp. 437-468, December 1996

Downloads: (external link)
http://www.nber.org/papers/w5710.pdf (application/pdf)

Related works:
Journal Article: Why clashes between internal and external stability goals end in currency crises, 1797–1994 (1996) Downloads
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: https://EconPapers.repec.org/RePEc:nbr:nberwo:5710

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w5710

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().

 
Page updated 2019-10-18
Handle: RePEc:nbr:nberwo:5710