Contagious Currency Crises: First Tests
AbstractThe authors address the fact that the incidence of speculative attacks tends to be temporally correlated; that is, currency crises appear to pass 'contagiously' from one country to another. The paper provides a survey of the theoretical literature. The authors also provide empirical evidence consistent with the contagious nature of currency crises. They estimate that the existence of a currency crisis elsewhere in the world (whether successful or not) raises the probability of an attack on the domestic currency by 8 percent, even after taking account of a variety of domestic political and economic factors. Copyright 1996 by The editors of the Scandinavian Journal of Economics.
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Bibliographic InfoArticle provided by Wiley Blackwell in its journal Scandinavian Journal of Economics.
Volume (Year): 98 (1996)
Issue (Month): 4 (December)
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Web page: http://onlinelibrary.wiley.com/journal/10.1111/(ISSN)1467-9442
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