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Currency Crises

There is no universally accepted definition of a currency crisis, but most would agree that they all involve one key element: investors fleeing a currency en masse out of fear that it might be devalued, in turn fueling the very devaluation they anticipated. Although such crises—the Latin American debt crisis of the 1980s, the speculations on European currencies in the early 1990s, and the ensuing Mexican, South American, and Asian crises—have played a central role in world affairs and continue to occur at an alarming rate, many questions about their causes and effects remain to be answered. In this wide-ranging volume, some of the best minds in economics focus on the historical and theoretical aspects of currency crises to investigate three fundamental issues: What drives currency crises? How should government behavior be modeled? And what are the actual consequences to the real economy?

Reflecting the latest thinking on the subject, this offering from the NBER will serve as a useful basis for further debate on the theory and practice of speculative attacks, as well as a valuable resource as new crises loom.

356 pages | 49 line drawings, 41 tables | 6 x 9 | © 2000

National Bureau of Economic Research Conference Report

Economics and Business: Economics--International and Comparative

Table of Contents

Introduction: Paul Krugman

1. Currency Crisis and Unemployment: Sterling in 1931
Barry Eichengreen and Olivier Jeanne
Comment: Michael D. Bordo

2. Political Contagion in Currency Crises
Allan Drazen
Comment: Carmen M. Reinhart

3. Balance-of-Payments Crises in Emerging Markets: Large Capital Inflows and Sovereign Governments
Guillermo A. Calvo
Comment: Roberto Rigobon

4. The Onset of the East Asian Financial Crisis
Steven Radelet and Jeffrey Sachs
Comment: Frederic S. Mishkin

5. Is Launching the Euro Unstable in the Endgame?
Robert P. Flood and Peter M. Garber
Comment: Peter B. Kenen

6. The Mexican Peso in the Aftermath of the 1994 Currency Crisis
Sebastian Edwards and Miguel A. Savastano
Comment: J. Bradford De Long

7. The Aftermath of the 1992 ERM Breakup: Was There a Macroeconomic Free Lunch?
Robert J. Gordon
Comment: Paul Krugman

8. Current Account Reversals and Currency Crises: Empirical Regularities
Gian Maria Milesi-Ferretti and Assaf Razin
Comment: Jaume Ventura

9. Panel Presentation: The Asian Model, the Miracle, the Crisis, and the Fund
Jeffrey A. Frankel

10. Panel Presentation: Involving the Private Sector in Crisis Resolution
Peter B. Kenen

Author Index
Subject Index

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