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Contagious Currency Crises

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  • Eichengreen, Barry
  • Rose, Andrew K
  • Wyplosz, Charles

Abstract

This paper is concerned with the fact that the incidence of speculative attacks tend 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, and analyses the contagious nature of currency crises empirically. Using 30 years of panel data from 20 industrialized countries, we find evidence of contagion. Contagion appears to spread more easily to countries that are closely tied by international trade linkages than to countries in similar macroeconomic circumstances.

Suggested Citation

  • Eichengreen, Barry & Rose, Andrew K & Wyplosz, Charles, 1996. "Contagious Currency Crises," CEPR Discussion Papers 1453, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:1453
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    More about this item

    Keywords

    Channels; Data; International; Macroeconomic; Panel; Similarity; Speculative; Trade;
    All these keywords.

    JEL classification:

    • F31 - International Economics - - International Finance - - - Foreign Exchange

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