BIS Working Paper on currency crises

This paper modifies the Morris-Shin theoretical framework of financial crises by allowing prices to adjust freely to market conditions. It is then shown that all of the appealing characteristics of that setup are preserved even when public information has an endogenously disseminated component. Further, the paper's model delivers new policy implications and suggests a change in the approach of structural currency crisis empirical analysis.

Currency Crises and the Informational Role of Interest

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