Speculative attacks and currency crises: The Mexican experience
AbstractBy using data from the Mexican economy, this paper estimates a speculative attack model of currency crises in order to identify the role of macroeconomic fundamentals and early warning signals of a potential currency crisis. A deterioration in fundamentals appears to generate high one-step-ahead probabilities for the observed regime changes during the sample period 1982â€“1994. Particularly, foreign reserve losses, expansionary output, monetary and fiscal policies, an increase in inflation differentials and the share of short-term foreign currency-indexed debt, and an appreciation of the real exchange rate appear to have contributed to the speculative pressures and the associated regime changes. Copyright Kluwer Academic Publishers 1996
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Bibliographic InfoArticle provided by Springer in its journal Open Economies Review.
Volume (Year): 7 (1996)
Issue (Month): 1 (March)
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Web page: http://www.springerlink.com/link.asp?id=100323
Exchange rates; speculative attacks; economic fundamentals; Mexico; B22; S31; F33;
Find related papers by JEL classification:
- B22 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Macroeconomics
- S31 - - - - - -
- F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
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