Title

Policy inconsistencies and the political economy of currency crises

Document Type

Article

Publication Date

2-1-2017

Abstract

Formal models of currency crises have shown that inconsistencies between countries' domestic and exchange rate policies are a major cause of currency crises. To understand why such prolonged inconsistencies exist, we need to go beyond standard economic models and take political economy and behavioral considerations into account. We sketch out ways in which such considerations can be taken into account and highlight recent research that is useful for this project. We also offer some directions for future research and a brief guide to the empirical identification of currency crises and to the measurements of some of the relevant political and economic policy variables.

Publication Name

Journal of International Commerce, Economics and Policy

Volume Number

8

Issue Number

1

DOI

10.1142/S1793993317500041

Article

1750004

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