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A Model of Contagious Currency Crises with Application to Argentina
By:Miss Nada Choueiri
Published on 1999-03-01 by International Monetary Fund

This paper proposes a model of contagious currency crises: crises transmit across countries by raising the risk premium on government bonds. Three types of equilibria can occur: a “no-collapse” equilibrium (crises never transmit from abroad); a “collapse” equilibrium (crises are inevitably contagious); or a “fundamentals” equilibrium (crises are contagious if domestic fundamentals are weak). A calibration exercise finds that the 1995 turmoil in Argentina coexisted with a combination of risk-averse investors and weak credibility in the currency board arrangement. This turmoil could only be attributed to a Tequila effect from the Mexican crisis alone if investors were excessively risk-averse.

This Book was ranked at 15 by Google Books for keyword Currency crisis.

Book ID of A Model of Contagious Currency Crises with Application to Argentina's Books is 0jbMK6lWkmkC, Book which was written byMiss Nada Choueirihave ETAG "bL26DhGLx+g"

Book which was published by International Monetary Fund since 1999-03-01 have ISBNs, ISBN 13 Code is 9781451892345 and ISBN 10 Code is 1451892349

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