Speculative Attacks and Models of Balance of Payments Crises

Author/Editor:

Robert P Flood ; Jagdeep S. Bhandari ; Pierre-Richard Agénor

Publication Date:

October 1, 1991

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

This paper reviews recent developments in the theoretical and empirical analysis of balance-of-payments crises. A simple analytical model highlighting the process leading to such crises is first developed. The basic framework is then extended to deal with a variety of issues, such as: alternative post-collapse regimes, uncertainty, real sector effects, external borrowing and capital controls, imperfect asset substitutability, sticky prices, and endogenous policy switches. Empirical evidence on the collapse of exchange rate regimes is also examined, and the major implications of the analysis for macroeconomic policy discussed.

Series:

Working Paper No. 1991/099

Subject:

Conventional peg Domestic credit Exchange rate arrangements Exchange rates Foreign exchange Money Real exchange rates

Notes:

Also published in Staff Papers, Vol. 39, No. 2, June 1992.

English

Publication Date:

October 1, 1991

ISBN/ISSN:

9781451852189/1018-5941

Stock No:

WPIEA0991991

Pages:

64

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