Actions for A Model of Contagious Currency Crises with Application to Argentina [electronic resource]

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A Model of Contagious Currency Crises with Application to Argentina [electronic resource]

Author
Choueiri, Nada
Published
Washington : International Monetary Fund March 1999
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Summary
Annotation This paper proposes a model of contagious currency crises: crises transmit across countries by raising the risk premium on government bonds. Three types of equilibria can occur: a no-collapse equilibrium (crises never transmit from abroad); a collapse equilibrium (crises are inevitably contagious); or a fundamentals equilibrium (crises are contagious if domestic fundamentals are weak). a calibration exercise finds that the 1995 turmoil in Argentina coexisted with a combination of risk-averse investors and weak credibility in the currency board arrangement. This turmoil could only be attributed to a Tequila effect from the Mexican crisis alone if investors were excessively risk-averse.
Genre(s)
ISBN
9781451844788
1451844786 (Trade Paper)
View MARC record | catkey: 15220040