A case study of a currency crisis: the Russian default of 1998
This paper uses a currency crisis framework to analyze the currency devaluation and debt default of post-Soviet Russia in August 1998. The authors show that even though the Russian economy recorded positive growth immediately preceding the default, the atmosphere was reflective of an impending crisis. The authors then consider the symptoms of a currency crisis—specifically public and private debt responsibilities, devaluation expectations, and contractionary monetary policy—and show that they were present in Russia at that time. Three generations of currency crisis models are reviewed, followed by speculation that the Russian default was a product not only of fiscal deficits but also of a fragile financial system and contractionary monetary policy. The authors address the possibility that the usual prescription for a currency crisis, that is, increasing interest rates, may have accelerated the default and that a case-by-case prescription may afford a better solution than a blanket policy of increasing interest rates in the face of devaluation.
Volume (Year): (2002)
Issue (Month): Nov ()
|Contact details of provider:|| Postal: P.O. Box 442, St. Louis, MO 63166|
Web page: http://www.stlouisfed.org/
More information through EDIRC
|Order Information:|| Web: https://research.stlouisfed.org/publications/ Email: |
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Krugman, Paul, 1979. "A Model of Balance-of-Payments Crises," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 11(3), pages 311-25, August.
- V. Popov, 1999.
"Lessons of the Currency Crisis in Russia and in Other Countries,"
N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 6.
- V. Popov, 2000. "Lessons of the Currency Crisis in Russia and in Other Countries," Problems of Economic Transition, M.E. Sharpe, Inc., vol. 43(1), pages 45-73, May.
- Aghion, Philippe & Bacchetta, Philippe & Banerjee, Abhijit, 2000.
"A simple model of monetary policy and currency crises,"
European Economic Review,
Elsevier, vol. 44(4-6), pages 728-738, May.
- Philippe Aghion & Philippe Bacchetta & Abhijit Banerjee, 1999. "A Simple Model of Monetary Pollicy and Currency Crises," Working Papers 99.05, Swiss National Bank, Study Center Gerzensee.
- Philippe AGHION & Philippe BACCHETTA & Abhijit BANERJEE, 1999. "A Simple Model of Monetary Policy and Currency Crises," Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP) 9914, Université de Lausanne, Faculté des HEC, DEEP.
- Maurice Obstfeld, 1984.
"Rational and Self-Fulfilling Balance-of-Payments Crises,"
NBER Working Papers
1486, National Bureau of Economic Research, Inc.
- Obstfeld, Maurice, 1986. "Rational and Self-fulfilling Balance-of-Payments Crises," American Economic Review, American Economic Association, vol. 76(1), pages 72-81, March.
When requesting a correction, please mention this item's handle: RePEc:fip:fedlrv:y:2002:i:nov:p:7-18:n:v.84no.6. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Anna Xiao)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.