Government Finance in the Wake of Currency
نویسندگان
چکیده
This paper addresses two questions: (i) how do governments actually pay for the Þscal costs associated with currency crises; and (ii) what are the implications of different Þnancing methods for post-crisis rates of inßation and depreciation? We study these questions using a general equilibrium model in which a currency crisis is triggered by prospective government deÞcits. We then use our model in conjunction with Þscal data to interpret government Þnancing in the wake of three recent currency crises: Korea (1997), Mexico (1994) and Turkey (2001). J.E.L. ClassiÞcation: F31
منابع مشابه
Rochester Government Finance in the Wake of Currency Crises Government Finance in the Wake of Currency Crises *
This paper addresses two questions: (i) how do governments actually pay for the Þscal costs associated with currency crises; and (ii) what are the implications of different Þnancing methods for post-crisis rates of inßation and depreciation? We study these questions using a general equilibrium model in which a currency crisis is triggered by prospective government deÞcits. We then use our model...
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We are grateful for an NSF grant through the National Bureau of Economic Research and a grant from the World Bank. The opinions in this paper are those of the authors and not necessarily those of the Federal Reserve Bank of Chicago or the World Bank. We thank Martin Bodenstein, Yuliya Mescheryakova and Jeffrey Wood for valuable comments and Selim Elekdag, Su Youne Lee and Mi Hwa Park for invalu...
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