Government guarantees and self-fulfilling speculative attacks

Government Guarantees and Self-FulÞlling Speculative Attacks

The Effects of Economic Sanctions and Speculative Attacks on Inflation

This paper surveys the persian monetary crises due to economic sanctions and speculative attacks that leads to high inflation. Economic sanctions are associated with various forms of trade barriers and restriction on financial transactions. Among the most influential sanctions on Iran's oil export and central bank sanctions are noted that their Aims to reduce Iran's oil revenues and Devaluation...

Speculative Attacks and Financial Architecture: Experimental Analysis of Coordination Games with Public and Private Information

Speculative Attacks are a coordination game with multiple equilibria: If a sufficient number of traders expect devaluation, market pressure forces the central bank to abandon a currency peg that it would have kept otherwise. Thus, expectations are self-fulfilling. Applying the global games approach, Morris and Shin (1998) have shown that there is a unique equilibrium in threshold strategies, if...

A Model of Crises in Emerging Markets

This paper presents a perfect foresight model of speculative attacks on emerging markets. Credit constrained governments are assumed to have two objectives: to accumulate liquid assets in order to self-insure against shocks to national consumption and to insure poorly regulated domestic ®nancial markets. This policy regime generates endogenous ®scal de®cits de®ned to include the growth of conti...

SOM-based data analysis of speculative attacks' real effects

In some cases, currency crises are followed by strong recessions (e.g., recent Asian and Argentinean crises), but in other cases they are not. This paper uses Self-Organizing Maps (SOM) to search for meaningful associations between speculative attacks’ real effects and 28 variables that characterize the economic, financial, legal, and socio-political structure of the country at the onset of the...