Government Finance in the Wake of Currency Crises∗
نویسندگان
چکیده
We address three questions: (i) Can classical models be reconciled with the fact that many crises are marked by high rates of depreciation and small increases in seignorage revenue? (ii) What are the implications of different financing methods for post-crisis rates of inflation and depreciation? (iii) How do governments pay for the fiscal costs associated with currency crises? To study these questions we use a general equilibrium model in which prospective government deficits trigger a currency crisis. We then use our model in conjunction with fiscal data to interpret government financing in the wake of three recent currency crises: Korea (1997), Mexico (1994) and Turkey (2001). J.E.L. Classification: 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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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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