Currency Crises and Foreign Reserves: A Simple Model
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Bibliographic Details
Main Author: Disyatat, Piti (Author)
Format: Electronic eBook
Language:English
Published: Washington, D.C International Monetary Fund 2001
Series:IMF Working Papers Working Paper No. 01/18
Links:http://elibrary.imf.org/view/IMF001/01474-9781451843644/01474-9781451843644/01474-9781451843644.xml
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http://elibrary.imf.org/view/IMF001/01474-9781451843644/01474-9781451843644/01474-9781451843644.xml
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http://elibrary.imf.org/view/IMF001/01474-9781451843644/01474-9781451843644/01474-9781451843644.xml
http://elibrary.imf.org/view/IMF001/01474-9781451843644/01474-9781451843644/01474-9781451843644.xml
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http://elibrary.imf.org/view/IMF001/01474-9781451843644/01474-9781451843644/01474-9781451843644.xml
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http://elibrary.imf.org/view/IMF001/01474-9781451843644/01474-9781451843644/01474-9781451843644.xml
http://elibrary.imf.org/view/IMF001/01474-9781451843644/01474-9781451843644/01474-9781451843644.xml
http://elibrary.imf.org/view/IMF001/01474-9781451843644/01474-9781451843644/01474-9781451843644.xml
http://elibrary.imf.org/view/IMF001/01474-9781451843644/01474-9781451843644/01474-9781451843644.xml
http://elibrary.imf.org/view/IMF001/01474-9781451843644/01474-9781451843644/01474-9781451843644.xml
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Abstract:This paper addresses the important question of how far a government will run down its stock of foreign reserves in a defense of a fixed exchange rate. An optimizing model of currency crisis is presented in which the decision of whether or not to borrow in a defense of a peg is explicitly analyzed. The threshold level of reserves is then determined endogenously and shown to be a function of fundamental economic variables. The analysis also demonstrates how an increase in the level of reserves, a credit-rating upgrade, or the imposition of capital controls can remove the multiplicity of equilibria
Physical Description:1 Online-Ressource (24 p)
ISBN:145184364X
9781451843644