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)
Pages: 66 pages
Date: 2003-05
New Economics Papers: this item is included in nep-dge and nep-fin
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17)

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Related works:
Journal Article: Government finance in the wake of currency crises (2006)
Working Paper: Government Finance in the Wake of Currency Crises (2005)
Working Paper: Government Finance in the Wake of Currency Crises (2003)
Working Paper: Government Finance in the Wake of Currency Crises (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:roc:rocher:501

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