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Models of currency crises with self-fulfilling features: A comment

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  • Meixing Dai

Abstract

Much attention has been paid to models of currency crisis with self-fulfilling features and the concept of multiple equilibria developed in the 1990s. They aim at explaining currency crisis without apparent fundamental disequilibrium. They are also useful to render account for currency crisis unpredictability. This paper re-examines an illustrative model of Obstfeld (1996), in which high unemployment may cause an exchange-rate crisis with selffulfilling features. By completing the algebraic demonstration, this paper shows that there are less equilibria than conjectured.

Suggested Citation

  • Meixing Dai, 2009. "Models of currency crises with self-fulfilling features: A comment," Working Papers of BETA 2009-14, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    • Handle: RePEc:ulp:sbbeta:2009-14
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    References listed on IDEAS

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    More about this item

    Keywords

    Self-fulfilling currency crisis; Fixed exchange rate; Multiple equilibria.;
    All these keywords.

    JEL classification:

    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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