Jerome L. Stein
- Published in print:
- 2006
- Published Online:
- May 2006
- ISBN:
- 9780199280575
- eISBN:
- 9780191603501
- Item type:
- book
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0199280576.001.0001
- Subject:
- Economics and Finance, Financial Economics
This book focuses on the interaction between equilibrium real exchange rates, optimal external debt, endogenous optimal growth, and current account balances in a world of uncertainty. The theoretical ...
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This book focuses on the interaction between equilibrium real exchange rates, optimal external debt, endogenous optimal growth, and current account balances in a world of uncertainty. The theoretical parts result from interdisciplinary research between economics and state of the art applied mathematics. From the economic theory and the mathematics of stochastic optimal control, benchmarks are derived for the optimal debt and equilibrium real exchange rate in an environment where both the return on capital and the real rate of interest are stochastic variables. The theoretically derived equilibrium real exchange rate — the natural real exchange rate (NATREX) — is where the real exchange rate is heading. These benchmarks are applied to answer the following questions: What is a theoretically based empirical measure of a “misaligned” exchange rate that increases the probability of a significant depreciation or a currency crisis? What is a theoretically based empirical measure of an “excess” debt that increases the probability of a debt crisis? What is the interaction between an excess debt and a misaligned exchange rate? The theory is applied to evaluate the Euro exchange rate, the exchange rates of the transition economies of Eastern Europe, the sustainability of U.S. current account deficits, and derives warning signals of the Asian crises, defaults, and debt crises in emerging markets.Less
This book focuses on the interaction between equilibrium real exchange rates, optimal external debt, endogenous optimal growth, and current account balances in a world of uncertainty. The theoretical parts result from interdisciplinary research between economics and state of the art applied mathematics. From the economic theory and the mathematics of stochastic optimal control, benchmarks are derived for the optimal debt and equilibrium real exchange rate in an environment where both the return on capital and the real rate of interest are stochastic variables. The theoretically derived equilibrium real exchange rate — the natural real exchange rate (NATREX) — is where the real exchange rate is heading. These benchmarks are applied to answer the following questions: What is a theoretically based empirical measure of a “misaligned” exchange rate that increases the probability of a significant depreciation or a currency crisis? What is a theoretically based empirical measure of an “excess” debt that increases the probability of a debt crisis? What is the interaction between an excess debt and a misaligned exchange rate? The theory is applied to evaluate the Euro exchange rate, the exchange rates of the transition economies of Eastern Europe, the sustainability of U.S. current account deficits, and derives warning signals of the Asian crises, defaults, and debt crises in emerging markets.
Phillippe Aghion and Abhijit Banerjee
- Published in print:
- 2005
- Published Online:
- January 2007
- ISBN:
- 9780199248612
- eISBN:
- 9780191714719
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199248612.003.0007
- Subject:
- Economics and Finance, Development, Growth, and Environmental
This chapter presents a highly stylized model, based on limited access to credit that can explain why an economy that is carrying a large amount of foreign currency debt might be vulnerable to ...
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This chapter presents a highly stylized model, based on limited access to credit that can explain why an economy that is carrying a large amount of foreign currency debt might be vulnerable to currency crises, leaving it with a depreciated currency and GDP that remains lower than the pre-crisis trend for some time into the future. It is argued that in a monetary economy with standard price rigidities, credit constraints together with pecuniary externalities working through the nominal exchange rate are sufficient to generate currency crises.Less
This chapter presents a highly stylized model, based on limited access to credit that can explain why an economy that is carrying a large amount of foreign currency debt might be vulnerable to currency crises, leaving it with a depreciated currency and GDP that remains lower than the pre-crisis trend for some time into the future. It is argued that in a monetary economy with standard price rigidities, credit constraints together with pecuniary externalities working through the nominal exchange rate are sufficient to generate currency crises.
Jerome L. Stein
- Published in print:
- 2006
- Published Online:
- May 2006
- ISBN:
- 9780199280575
- eISBN:
- 9780191603501
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0199280576.003.0008
- Subject:
- Economics and Finance, Financial Economics
The Asian financial crises were unexpected by the market and many countries in the region experienced it at about the same time. Drawing upon the theoretical analyses in chapters 2-4, an operational ...
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The Asian financial crises were unexpected by the market and many countries in the region experienced it at about the same time. Drawing upon the theoretical analyses in chapters 2-4, an operational theory is provided to answer the following questions for the Asian countries: Was a currency crisis produced by an overvalued real exchange rate? Was a debt crisis produced by an “excessive/unsustainable” external debt? What was the interaction between the two? The models imply a set of objective, theoretically-based warning signals and empirical analysis allows the assessment of which countries were or were not highly vulnerable to shocks.Less
The Asian financial crises were unexpected by the market and many countries in the region experienced it at about the same time. Drawing upon the theoretical analyses in chapters 2-4, an operational theory is provided to answer the following questions for the Asian countries: Was a currency crisis produced by an overvalued real exchange rate? Was a debt crisis produced by an “excessive/unsustainable” external debt? What was the interaction between the two? The models imply a set of objective, theoretically-based warning signals and empirical analysis allows the assessment of which countries were or were not highly vulnerable to shocks.
Michael Chui and Prasanna Gai
- Published in print:
- 2005
- Published Online:
- July 2005
- ISBN:
- 9780199267750
- eISBN:
- 9780191602504
- Item type:
- book
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0199267758.001.0001
- Subject:
- Economics and Finance, Financial Economics
This book offers an analytical perspective on the policy debate on the design and reform of the international financial architecture. It stresses the role played by coordination problems in the ...
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This book offers an analytical perspective on the policy debate on the design and reform of the international financial architecture. It stresses the role played by coordination problems in the origin and management of crises by relating the insights of the new literature on global games to earlier work on currency crises, bank runs, and sovereign debt default. It draws on recent research and policy work to examine the debate on the design of sovereign bankruptcy procedures, the role of the IMF in influencing the actions of creditors and debtors, and the role of private sector involvement in the management of financial crises.Less
This book offers an analytical perspective on the policy debate on the design and reform of the international financial architecture. It stresses the role played by coordination problems in the origin and management of crises by relating the insights of the new literature on global games to earlier work on currency crises, bank runs, and sovereign debt default. It draws on recent research and policy work to examine the debate on the design of sovereign bankruptcy procedures, the role of the IMF in influencing the actions of creditors and debtors, and the role of private sector involvement in the management of financial crises.
Jerome L. Stein
- Published in print:
- 2006
- Published Online:
- May 2006
- ISBN:
- 9780199280575
- eISBN:
- 9780191603501
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0199280576.003.0001
- Subject:
- Economics and Finance, Financial Economics
This overview chapter explains the relevance and the contributions of this book to economic theory and policy. The economic theory and mathematics developed in chapters 2 and 3 derive benchmarks for ...
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This overview chapter explains the relevance and the contributions of this book to economic theory and policy. The economic theory and mathematics developed in chapters 2 and 3 derive benchmarks for the optimal debt in an environment where both the return on capital and the real rate of interest are stochastic variables. The equilibrium real exchange rate, the subject of chapter 4, is where the real exchange rate is heading. These benchmarks are applied in chapters 5-9 to the euro, the real exchange rate of the transition economies in Eastern Europe, default risks in emerging market countries, the Asian crises, and the United States current account deficits.Less
This overview chapter explains the relevance and the contributions of this book to economic theory and policy. The economic theory and mathematics developed in chapters 2 and 3 derive benchmarks for the optimal debt in an environment where both the return on capital and the real rate of interest are stochastic variables. The equilibrium real exchange rate, the subject of chapter 4, is where the real exchange rate is heading. These benchmarks are applied in chapters 5-9 to the euro, the real exchange rate of the transition economies in Eastern Europe, default risks in emerging market countries, the Asian crises, and the United States current account deficits.
Volbert Alexander, George M. von Furstenberg, and Jacques Mélitz (eds)
- Published in print:
- 2004
- Published Online:
- August 2004
- ISBN:
- 9780199271405
- eISBN:
- 9780191601200
- Item type:
- book
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0199271402.001.0001
- Subject:
- Economics and Finance, Economic Systems
Financial services with global reach are a highly information-intensive business. In it, the ability to deliver reliable price formation, global liquidity, and network benefits is increasingly ...
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Financial services with global reach are a highly information-intensive business. In it, the ability to deliver reliable price formation, global liquidity, and network benefits is increasingly critical for the choice of currency denomination. Conversely, the exchange value and prospective usefulness of small currencies becomes less certain, and transaction costs for them may rise. Economic instability is invited as currency and portfolio substitution with the dominant international currency denomination increase the likelihood of currency mismatches and financial crises. In view of these failings of many of the financially small currencies, the number of currencies worldwide well may shrink greatly in the decades ahead.Drawing lessons mostly from contemporary developments, this book analyzes current approaches to overcoming excessive monetary division within integrating regions. It focuses on the effects of monetary or currency unions on trade among members and on their financial development and stability. In the process, contributors analyze the promise and subversion of hard pegs such as that attempted by the currency board of Argentina. They also examine unilateral dollarization -- adopted in a few countries formally, and in many more informally without giving up the local currency -- and multilateral monetary union in Europe. There the euro functions as an innovative, non-hegemonic form of internationally shared and co-managed fiat money that will also be adopted by the 2004 class of European-Union accession countries in coming years.Less
Financial services with global reach are a highly information-intensive business. In it, the ability to deliver reliable price formation, global liquidity, and network benefits is increasingly critical for the choice of currency denomination. Conversely, the exchange value and prospective usefulness of small currencies becomes less certain, and transaction costs for them may rise. Economic instability is invited as currency and portfolio substitution with the dominant international currency denomination increase the likelihood of currency mismatches and financial crises. In view of these failings of many of the financially small currencies, the number of currencies worldwide well may shrink greatly in the decades ahead.
Drawing lessons mostly from contemporary developments, this book analyzes current approaches to overcoming excessive monetary division within integrating regions. It focuses on the effects of monetary or currency unions on trade among members and on their financial development and stability. In the process, contributors analyze the promise and subversion of hard pegs such as that attempted by the currency board of Argentina. They also examine unilateral dollarization -- adopted in a few countries formally, and in many more informally without giving up the local currency -- and multilateral monetary union in Europe. There the euro functions as an innovative, non-hegemonic form of internationally shared and co-managed fiat money that will also be adopted by the 2004 class of European-Union accession countries in coming years.
Guillermo Perry and Luis Servén
- Published in print:
- 2004
- Published Online:
- August 2004
- ISBN:
- 9780199271405
- eISBN:
- 9780191601200
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0199271402.003.0012
- Subject:
- Economics and Finance, Economic Systems
The Argentine crisis has been variously blamed on fiscal imbalances, real overvaluation, and self-fulfilling investor pessimism triggering a capital flow reversal. This chapter provides a full ...
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The Argentine crisis has been variously blamed on fiscal imbalances, real overvaluation, and self-fulfilling investor pessimism triggering a capital flow reversal. This chapter provides a full assessment of the role of these and other ingredients in the collapse. It shows that in the final years of its Convertibility program, Argentina was not hit harder than other emerging markets in Latin America by global terms-of-trade shocks and financial disturbances. Hence the crisis reflects primarily the high vulnerability to disturbances built into Argentina’s policy framework. These fragilities reinforced each other in such a way that taken jointly they led to a much larger vulnerability to adverse external shocks than in any other country in the region.Less
The Argentine crisis has been variously blamed on fiscal imbalances, real overvaluation, and self-fulfilling investor pessimism triggering a capital flow reversal. This chapter provides a full assessment of the role of these and other ingredients in the collapse. It shows that in the final years of its Convertibility program, Argentina was not hit harder than other emerging markets in Latin America by global terms-of-trade shocks and financial disturbances. Hence the crisis reflects primarily the high vulnerability to disturbances built into Argentina’s policy framework. These fragilities reinforced each other in such a way that taken jointly they led to a much larger vulnerability to adverse external shocks than in any other country in the region.
Giovanni Piersanti
- Published in print:
- 2012
- Published Online:
- September 2012
- ISBN:
- 9780199653126
- eISBN:
- 9780191741210
- Item type:
- book
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199653126.001.0001
- Subject:
- Economics and Finance, Macro- and Monetary Economics
This book deals with the genesis and dynamics of exchange rate crises in fixed or managed exchange rate systems. It provides a comprehensive treatment of the existing theories of exchange rate crises ...
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This book deals with the genesis and dynamics of exchange rate crises in fixed or managed exchange rate systems. It provides a comprehensive treatment of the existing theories of exchange rate crises and of financial market runs. The book aims to provide a survey of both the theoretical literature on international financial crises and a systematic treatment of the analytical models. It analyzes a series of macroeconomic models and demonstrates their properties and conclusions, including comparative statics and dynamic behavior. The models cover the range of phenomena exhibited in modern crises experienced in countries with fixed or managed exchange rate systems. Among the topics covered, beyond currency sustainability, are bank runs, the interaction between bank solvency and currency stability, capital flows and borrowing constraints, uncertainty about government policies, asymmetric information and herding behavior, contagion across markets and countries, financial markets runs and asset price bubbles, strategic interaction among agents and equilibrium selection, the dynamics of speculative attacks and of financial crashes in international capital markets.Less
This book deals with the genesis and dynamics of exchange rate crises in fixed or managed exchange rate systems. It provides a comprehensive treatment of the existing theories of exchange rate crises and of financial market runs. The book aims to provide a survey of both the theoretical literature on international financial crises and a systematic treatment of the analytical models. It analyzes a series of macroeconomic models and demonstrates their properties and conclusions, including comparative statics and dynamic behavior. The models cover the range of phenomena exhibited in modern crises experienced in countries with fixed or managed exchange rate systems. Among the topics covered, beyond currency sustainability, are bank runs, the interaction between bank solvency and currency stability, capital flows and borrowing constraints, uncertainty about government policies, asymmetric information and herding behavior, contagion across markets and countries, financial markets runs and asset price bubbles, strategic interaction among agents and equilibrium selection, the dynamics of speculative attacks and of financial crashes in international capital markets.
Jong‐Il You
- Published in print:
- 2006
- Published Online:
- May 2007
- ISBN:
- 9780195189322
- eISBN:
- 9780199783823
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780195189322.003.0007
- Subject:
- Economics and Finance, International
This chapter reviews Korea's experience with economic liberalization since the early 1980s. Section 1 provides a brief history of the economic liberalization policy in the broader context of the rise ...
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This chapter reviews Korea's experience with economic liberalization since the early 1980s. Section 1 provides a brief history of the economic liberalization policy in the broader context of the rise and fall of the Korean model of development. Section 2 analyzes the major economic consequences of the liberalization policy, including its impact on growth and distribution, the currency crisis, and the financial crisis. Section 3 examines the macroeconomic adjustments since the crisis, including the impact on the labor market and income distribution. Section 4 reviews the economic and social policy reforms that the government has pursued since the crisis. The concluding section draws some lessons on liberalization policy from the Korean experience.Less
This chapter reviews Korea's experience with economic liberalization since the early 1980s. Section 1 provides a brief history of the economic liberalization policy in the broader context of the rise and fall of the Korean model of development. Section 2 analyzes the major economic consequences of the liberalization policy, including its impact on growth and distribution, the currency crisis, and the financial crisis. Section 3 examines the macroeconomic adjustments since the crisis, including the impact on the labor market and income distribution. Section 4 reviews the economic and social policy reforms that the government has pursued since the crisis. The concluding section draws some lessons on liberalization policy from the Korean experience.
John Greenwood
- Published in print:
- 2007
- Published Online:
- September 2011
- ISBN:
- 9789622098909
- eISBN:
- 9789882207004
- Item type:
- book
- Publisher:
- Hong Kong University Press
- DOI:
- 10.5790/hongkong/9789622098909.001.0001
- Subject:
- Economics and Finance, South and East Asia
This book describes how Hong Kong surmounted the great currency crisis of 1982–83. The book rationalizes why and how the Hong Kong Monetary Authority evolved from a pure currency board to a near ...
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This book describes how Hong Kong surmounted the great currency crisis of 1982–83. The book rationalizes why and how the Hong Kong Monetary Authority evolved from a pure currency board to a near central bank, why the linked rate system was put in place, and how it works.Less
This book describes how Hong Kong surmounted the great currency crisis of 1982–83. The book rationalizes why and how the Hong Kong Monetary Authority evolved from a pure currency board to a near central bank, why the linked rate system was put in place, and how it works.
Manuel F. Montes
- Published in print:
- 2001
- Published Online:
- October 2011
- ISBN:
- 9780198296867
- eISBN:
- 9780191685286
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780198296867.003.0005
- Subject:
- Economics and Finance, Development, Growth, and Environmental, Macro- and Monetary Economics
While the Thai baht had lost about 55% of its value in terms of the US dollar by the end of January 1998 because it sold the majority of its international reserves in 1997, other currencies across ...
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While the Thai baht had lost about 55% of its value in terms of the US dollar by the end of January 1998 because it sold the majority of its international reserves in 1997, other currencies across Southeast Asia also experienced such declines since non-resident portfolios retreated from investment in economies that exuded similar characteristics with that of Thailand. The crisis experienced by both the Thai baht and the Indonesian rupiah are the most recent in the series of crises that have occurred recently throughout the developing region that are allegedly caused by a faulty domestic banking system and swelling capital inflows. This chapter emphasizes how the understanding of such crises should be given much attention because of the social costs involved. The chapter examines the various economic implications of these crises in developing countries particularly of those in Southeast Asia.Less
While the Thai baht had lost about 55% of its value in terms of the US dollar by the end of January 1998 because it sold the majority of its international reserves in 1997, other currencies across Southeast Asia also experienced such declines since non-resident portfolios retreated from investment in economies that exuded similar characteristics with that of Thailand. The crisis experienced by both the Thai baht and the Indonesian rupiah are the most recent in the series of crises that have occurred recently throughout the developing region that are allegedly caused by a faulty domestic banking system and swelling capital inflows. This chapter emphasizes how the understanding of such crises should be given much attention because of the social costs involved. The chapter examines the various economic implications of these crises in developing countries particularly of those in Southeast Asia.
Eduardo Fernández-Arias, Ugo Panizza, and Ernesto Stein
- Published in print:
- 2004
- Published Online:
- August 2004
- ISBN:
- 9780199271405
- eISBN:
- 9780191601200
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0199271402.003.0009
- Subject:
- Economics and Finance, Economic Systems
The negative effects on exports and FDI flows of an exchange rate misalignment are amplified when the misalignment is among countries that share a regional integration agreement. Such agreements ...
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The negative effects on exports and FDI flows of an exchange rate misalignment are amplified when the misalignment is among countries that share a regional integration agreement. Such agreements strengthen the well-established relationship between real appreciation and currency crises. We conclude that coordination to achieve real-exchange-rate consistency within blocs is key to macro stability and, a fortiori, sustainable trade agreements.Less
The negative effects on exports and FDI flows of an exchange rate misalignment are amplified when the misalignment is among countries that share a regional integration agreement. Such agreements strengthen the well-established relationship between real appreciation and currency crises. We conclude that coordination to achieve real-exchange-rate consistency within blocs is key to macro stability and, a fortiori, sustainable trade agreements.
Stephany Griffith-Jones, Manuel F. Montes, and Anwar Nasution (eds)
- Published in print:
- 2001
- Published Online:
- October 2011
- ISBN:
- 9780198296867
- eISBN:
- 9780191685286
- Item type:
- book
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780198296867.001.0001
- Subject:
- Economics and Finance, Development, Growth, and Environmental, Macro- and Monetary Economics
The currency crises that engulfed East Asian economies in 1997 and Mexico in 1994 — and their high development costs — raise a serious concern about the net benefits for developing countries of large ...
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The currency crises that engulfed East Asian economies in 1997 and Mexico in 1994 — and their high development costs — raise a serious concern about the net benefits for developing countries of large flows of potentially reversible short-term international capital. This book examines in depth the macroeconomic and other policy dilemmas confronting public authorities in the emerging economies as they deal with short-term capital movements, especially in the period before the outbreak of these crises. The studies are based on comparative case studies of key emerging economies. Valuable insights are also derived from contrasts between the East Asian, Latin American, African, and European experiences, between the financial and real effects of financial flows, and between private and public responsibilities in managing financial markets. This book analytically identifies the weaknesses in both domestic and international capital market regimes. The recommendations derived from this analysis apply to the development of financial markets in developing countries, the monitoring and regulation of mutual funds in source countries, and the future development of international capital markets.Less
The currency crises that engulfed East Asian economies in 1997 and Mexico in 1994 — and their high development costs — raise a serious concern about the net benefits for developing countries of large flows of potentially reversible short-term international capital. This book examines in depth the macroeconomic and other policy dilemmas confronting public authorities in the emerging economies as they deal with short-term capital movements, especially in the period before the outbreak of these crises. The studies are based on comparative case studies of key emerging economies. Valuable insights are also derived from contrasts between the East Asian, Latin American, African, and European experiences, between the financial and real effects of financial flows, and between private and public responsibilities in managing financial markets. This book analytically identifies the weaknesses in both domestic and international capital market regimes. The recommendations derived from this analysis apply to the development of financial markets in developing countries, the monitoring and regulation of mutual funds in source countries, and the future development of international capital markets.
Norman Flynn
- Published in print:
- 1999
- Published Online:
- October 2011
- ISBN:
- 9780198295525
- eISBN:
- 9780191685125
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780198295525.003.0002
- Subject:
- Business and Management, International Business, Political Economy
The 1997/8 Asian crisis was severe for most of the region and the financial crisis had a deep impact on many real economies. This chapter shows that explanations for the crisis are many and varied, ...
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The 1997/8 Asian crisis was severe for most of the region and the financial crisis had a deep impact on many real economies. This chapter shows that explanations for the crisis are many and varied, as are explanations for the ‘miracle years’; but there are some conclusions that can be safely made. First, the volume of funds involved in the currency and stock market crashes was large with respect to the size of the economies the funds were invested in. There were also large differences in economic performance in the region and while this did not affect the degree to which currency and stock speculation occurred, it did have an effect on the depth of the crisis and the speed of recovery. Thailand, Indonesia, and Korea were worst affected while the People's Republic of China and Taiwan were least badly hit. Finally, the international response to currency crises needs to be more sensitive to the nature and causes of economic problems and their social consequences. The measures described in the ‘letters of intent’ were not the best policies for the affected countries. In particular, they failed to deal with the question of inadequate domestic demand and included policies that made matters worse.Less
The 1997/8 Asian crisis was severe for most of the region and the financial crisis had a deep impact on many real economies. This chapter shows that explanations for the crisis are many and varied, as are explanations for the ‘miracle years’; but there are some conclusions that can be safely made. First, the volume of funds involved in the currency and stock market crashes was large with respect to the size of the economies the funds were invested in. There were also large differences in economic performance in the region and while this did not affect the degree to which currency and stock speculation occurred, it did have an effect on the depth of the crisis and the speed of recovery. Thailand, Indonesia, and Korea were worst affected while the People's Republic of China and Taiwan were least badly hit. Finally, the international response to currency crises needs to be more sensitive to the nature and causes of economic problems and their social consequences. The measures described in the ‘letters of intent’ were not the best policies for the affected countries. In particular, they failed to deal with the question of inadequate domestic demand and included policies that made matters worse.
Yung Chul Park
- Published in print:
- 2005
- Published Online:
- February 2006
- ISBN:
- 9780199276776
- eISBN:
- 9780191603051
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0199276773.003.0007
- Subject:
- Economics and Finance, South and East Asia
The Asian crisis occurred due to massive foreign investments in East Asia which created strong inflationary pressures, overvalued currencies, and growing current account deficits. An examination of ...
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The Asian crisis occurred due to massive foreign investments in East Asia which created strong inflationary pressures, overvalued currencies, and growing current account deficits. An examination of the post-crisis period questions whether the rapid recovery can be attributed to the IMF structural reform programs.Less
The Asian crisis occurred due to massive foreign investments in East Asia which created strong inflationary pressures, overvalued currencies, and growing current account deficits. An examination of the post-crisis period questions whether the rapid recovery can be attributed to the IMF structural reform programs.
Charles H. Feinstein, Peter Temin, and Gianni Toniolo
- Published in print:
- 2008
- Published Online:
- May 2008
- ISBN:
- 9780195307559
- eISBN:
- 9780199867929
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780195307559.003.0007
- Subject:
- Economics and Finance, Economic History
The descent into the depression left bankers, politicians, industrialists, and farmers seemingly helpless in the face of the successive currency and banking crises, growing stocks of unsold food, ...
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The descent into the depression left bankers, politicians, industrialists, and farmers seemingly helpless in the face of the successive currency and banking crises, growing stocks of unsold food, falling prices, and ever-lengthening queues of men and women waiting desperately for work or for relief payments. This chapter traces the movement into the crisis as it developed and spread as the gold standard broke down, describing the course of the Great Depression in the main areas of the world. A fundamental shift in policy, the abandonment of the gold standard, was needed to arrest this economic contraction. The chapter also considers whether a change of policy in Germany could have forestalled the Nazi regime which imposed horrible costs on Germany and the world.Less
The descent into the depression left bankers, politicians, industrialists, and farmers seemingly helpless in the face of the successive currency and banking crises, growing stocks of unsold food, falling prices, and ever-lengthening queues of men and women waiting desperately for work or for relief payments. This chapter traces the movement into the crisis as it developed and spread as the gold standard broke down, describing the course of the Great Depression in the main areas of the world. A fundamental shift in policy, the abandonment of the gold standard, was needed to arrest this economic contraction. The chapter also considers whether a change of policy in Germany could have forestalled the Nazi regime which imposed horrible costs on Germany and the world.
David McKay
- Published in print:
- 1996
- Published Online:
- October 2011
- ISBN:
- 9780198280583
- eISBN:
- 9780191684364
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780198280583.003.0005
- Subject:
- Political Science, European Union
This chapter examines the potential anomalies in the European Monetary System (EMS) and the experiences of countries affected by the exchange rate crisis of 1992 and 1993. It argues that the economic ...
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This chapter examines the potential anomalies in the European Monetary System (EMS) and the experiences of countries affected by the exchange rate crisis of 1992 and 1993. It argues that the economic and political sacrifices endured by Nordic countries, Great Britain, Italy, Spain, and France during the crisis can only be understood in the context of the federal bargain concluded with the signing of the Maastricht Treaty. The chapter suggests that the most remarkable feature of the currency crisis was the degree of consensus across political parties that there was no alternative but to defend exchange rate parities.Less
This chapter examines the potential anomalies in the European Monetary System (EMS) and the experiences of countries affected by the exchange rate crisis of 1992 and 1993. It argues that the economic and political sacrifices endured by Nordic countries, Great Britain, Italy, Spain, and France during the crisis can only be understood in the context of the federal bargain concluded with the signing of the Maastricht Treaty. The chapter suggests that the most remarkable feature of the currency crisis was the degree of consensus across political parties that there was no alternative but to defend exchange rate parities.
Dongchul Cho
- Published in print:
- 2012
- Published Online:
- January 2013
- ISBN:
- 9780199660957
- eISBN:
- 9780191748981
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199660957.003.0009
- Subject:
- Economics and Finance, Financial Economics, South and East Asia
This chapter argues that the Republic of Korea is not immune to global crises, but that a more than proportional response of gross domestic product to global crises does not seem to be the general ...
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This chapter argues that the Republic of Korea is not immune to global crises, but that a more than proportional response of gross domestic product to global crises does not seem to be the general case either. It also emphasizes the differences between the current recession and the currency crisis period. The chapter discusses the prospects for the Korean economy, including the issue regarding exports vs. domestic demand and domestic savings rate. The analyses form the basis for discussing appropriate policies for Korea in the aftermath of the global financial crisis.Less
This chapter argues that the Republic of Korea is not immune to global crises, but that a more than proportional response of gross domestic product to global crises does not seem to be the general case either. It also emphasizes the differences between the current recession and the currency crisis period. The chapter discusses the prospects for the Korean economy, including the issue regarding exports vs. domestic demand and domestic savings rate. The analyses form the basis for discussing appropriate policies for Korea in the aftermath of the global financial crisis.
Assaf Razin
- Published in print:
- 2015
- Published Online:
- May 2016
- ISBN:
- 9780262028592
- eISBN:
- 9780262327701
- Item type:
- chapter
- Publisher:
- The MIT Press
- DOI:
- 10.7551/mitpress/9780262028592.003.0008
- Subject:
- Economics and Finance, International
To understand the origins of currency crises is best to think about the basic tri-lemma in international finance. In international finance, the tri-lemma stems from the fact that economic policy ...
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To understand the origins of currency crises is best to think about the basic tri-lemma in international finance. In international finance, the tri-lemma stems from the fact that economic policy makers would like to achieve the openness to international capital flows; use monetary policy as a tool to help stabilize inflation, output, and the financial sector in the economy; and have stable exchange rates. The chapter reviews the analytics of first-generation, second generation and third generation of currency crises model and focus on the fragility of a single currency area.Less
To understand the origins of currency crises is best to think about the basic tri-lemma in international finance. In international finance, the tri-lemma stems from the fact that economic policy makers would like to achieve the openness to international capital flows; use monetary policy as a tool to help stabilize inflation, output, and the financial sector in the economy; and have stable exchange rates. The chapter reviews the analytics of first-generation, second generation and third generation of currency crises model and focus on the fragility of a single currency area.
Louis T. Wells
- Published in print:
- 2007
- Published Online:
- May 2007
- ISBN:
- 9780195310627
- eISBN:
- 9780199783847
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780195310627.003.0012
- Subject:
- Economics and Finance, International
Following several years of very strong economic growth, Southeast Asia's long boom came to an abrupt end. The first alarm sounded when Thailand's currency was devalued in July of 1997. As the ...
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Following several years of very strong economic growth, Southeast Asia's long boom came to an abrupt end. The first alarm sounded when Thailand's currency was devalued in July of 1997. As the financial crisis spread through the region, Indonesia was hit hardest of all. The collapse of the Indonesian rupiah brought down all twenty-seven of the electric power agreements that had so recently been concluded. Their debt-like characteristics made absolutely sure of this.Less
Following several years of very strong economic growth, Southeast Asia's long boom came to an abrupt end. The first alarm sounded when Thailand's currency was devalued in July of 1997. As the financial crisis spread through the region, Indonesia was hit hardest of all. The collapse of the Indonesian rupiah brought down all twenty-seven of the electric power agreements that had so recently been concluded. Their debt-like characteristics made absolutely sure of this.
